Some Tesla owners may see their insurance cost surge 30%
- Author: Zachary Reyes Jun 06, 2017,
Jun 06, 2017, 0:50
The AAA will charge Tesla Inc (NASDAQ:TSLA) vehicle owners as much as 30% more for auto insurance because claims on the Model S and Model X had higher frequency and higher costs compared with other cars in the same classes. In evaluating Tesla vehicles within their categories and to the overall population of vehicles, the report found the amount and cost of claims to be much higher than average. According to a report from Automotive News, AAA said it could raise its premiums by as much as 30 percent for the vehicles.
In a statement to Automotive News, Tesla said that its cars were being incorrectly grouped because they had a higher rate of acceleration than their peers. In general, large luxury vehicles like the Tesla Model S account for 13 percent more damage claims than average, with fix costs soaring 50 percent higher than average. "This analysis is severely flawed and is not reflective of reality", the Silicon Valley electric carmaker said to Automotive News. Tesla claims that its models were compared with the wrong competitors and if they were compared to similar vehicles, the crash data would not be an issue. "Consumers will pay for that when they go to insure one".
The institute claims that there are 46% more insurance claims filed for Tesla's Model S than there are for the segment average.
Given the growing number of vehicles with smart safety features such as autonomous emergency braking and adaptive cruise control, insurance companies may eventually start lowering premiums for cars featuring this technology, once data proves the efficacy of these systems in preventing collisions. The electric automaker assures that if it had been compared to the correct vehicles, the "false and misleading" data would match the electric automaker's own data.
The claim rates were also much costlier than competing vehicles in the Model S and Model X's respected classes. Furthermore, the Tesla Model S has been called a vehicle with the lowest likelihood of injury, per the National Highway Traffic Safety Administration. "We expect Model X to receive the best score for any SUV ever tested", a Tesla spokesperson stated. "It's proven in the data".
Other large insurers including State Farm and Geico told the publication they couldn't say whether or not they would also increase prices, but noted that data about claim frequency is always used to calculate insurance premiums. These leading insurers also appreciate the added safety benefit of Autopilot, which NHTSA found to reduce accident rates by 40%.
Digging into the details reveals quite a bit of activity from Tesla owners and their insurance companies.