Tesla (TSLA)’s plate is filled with snacks and delicacies. From the most iconic EVs to self-driving cars, and from robo-taxis to solar panels, the company has got it all. However, it has left a little space for dessert which will now be occupied by Tesla Insurance, a brand-new insurance product from the Elon Musk-led firm for Tesla owners.
New insurance for Tesla cars
On Wednesday Musk’s company announced that it will be providing auto insurance to Tesla car owners in California. The idea was first talked about by Musk in April but was announced officially yesterday. The company also suggests that it plans on expanding into other US states in the future.
The announcement states that Tesla Insurance is a
“competitively priced car insurance offering designed to provide Tesla owners with up to 20% lower rates, and in some cases as much as 30%.”
As is common with the company’s new initiatives, they received both fame and flak for their announcement.
A National Association of Mutual Insurance Companies spokeswoman welcomed the move. She said that auto insurance is a highly competitive marketplace and existing insurers have no qualms about automakers offering such coverage. However, as she spoke to Fox Business, she also said that such companies must be subjected to “rigorous insolvency and consumer protection regulations” by the state to ensure that the company is solvent and takes consumer protection seriously.
What does Tesla promise?
The company’s cheaper insurance plans can be available in less than a minute. It said that customers will be provided comprehensive coverage as well as management of claims. Another usual thing with Tesla’s bold comments was a quick retraction from the promises. Within hours of announcing the new product, the company revealed on Twitter that it is adding updates because of which Tesla Insurance will be offline for a short while.
Despite some hiccups, Musk’s argument about his company having direct knowledge of its customers’ risk profiles seem valid. He also said that the company will be able to keep its prices low because it provides advanced safety features like Autopilot to customers. However, Tesla has always emphasized on the fact that it doesn’t store or use vehicle data of its users when pricing insurance.
The launch of Insurance could help the company get some semblance after its stock fell 35% year-to-date. Note that Tesla cars are already more expensive than average to insure when compared to non-electric cars. Model S became the most expensive car to insure in 2018 according to the Insurance Institute for Highway Safety.