New Tesla Auto Insurance Could Disrupt Industry

A new auto insurance policy from Tesla was released in October 2017 without much fanfare among North American car owners. The new policy, called InsureMyTesla, is a venture in part with Liberty Mutual Insurance Company. Earlier partnerships have been launched in Canada, Hong Kong and Australia.  The automaker hopes the policy will give its vehicle owners deeply discounted rates tailored specifically to the highly advanced safety features of Tesla autos. The autopilot system is unique in its field and highly-touted.

InsureMyTesla is a revolutionary type of coverage that takes into account that autonomous vehicles will make insurance coverage obsolete eventually. Self-driving cars are designed to be able to avoid every type of accident and they are coming closer and closer to that goal every year. Until the time that only self-driving cars populate the roads, it seems that all of the advanced safety features of Tesla cars would reduce insurance rates. Some owners, however, have reported rate hikes in their premiums for their Tesla cars.  

A recent example is that of AAA. They raised rates on Tesla automobiles in June, citing information which showed the Model X and Model S had higher than usual claim frequencies and higher costs of claims compared to others in the same class. In turn, Tesla called AAA’s analysis flawed and unrealistic. They noted that the comparisons were not among cars of the same caliber.

It was in response to rate hikes like that, that Tesla brought forth this new policy for its own owners. Where there have been Tesla friendly insurance policies in the works for some time, we still don’t know exactly how they will work with self-driving cars. There will be no need to insure against damages that do not happen any longer. Premiums will have to be based on some other factor. Ninety percent of accidents that occur in the United States are caused by the driver, according to the National Highway Traffic Safety Administration. If this changes, how will insurance companies make their money?

New policies will be based on other factors. Most likely, these new factors will be based on any potential costs incurred for maintenance after an accident of any kind. The types of accidents that occur on the road is about to change drastically along with the rate of accidents at all. For now, the new Tesla insurance gives benefits such as a valet service, one-year-rate guarantee, guaranteed repair, and rental car services. Until the roads are populated by self-driving cars only, we will have to wait to see how it affects our insurance rates.

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