Tesla Motors (TSLA) Making Traditional Auto Insurance Obsolete

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Tesla Motors Inc  is getting into the insurance business and will soon offer tailored cover plans specific to its electric cars. Beyond fending off the distrust that currently looms over its Autopilot, and rallying support behind a controversial merger with SolarCity, reports state that Tesla has its sights set on making InsureMyTesla a success.

InsureMyTesla sees Tesla Motors Inc team up with top insurance firms from around the world. The idea is to offer customized car insurance plans that are tailored Tesla EVs. The program is underwritten by the likes of QBE Insurance and AXA General with policies set rolled out in Hong Kong and Australia. Business Insider assures that the program should grow into other markets not long after its landing.

Tesla Motors Inc (NASDAQ:TSLA)
Tesla Model X

Tesla leads the way as disrupter of the norm

As cars shift from hands-on-the-wheel guidance to automatic driving systems, responsibility for the car’s movement shifts from drivers to the automakers themselves. It is noted by analysts that the introduction of autonomous cars will completely disrupt the form of conventional insurance plans. Today, there is a recorded and significant increase in drivers using semi-autonomous driving systems like Tesla’s Autopilot.

Insurance models will need a lot of rethinking in the coming years in order to accommodate the rise in electric and self-driving cars. Very few insurers, for instance, effectively cover items like battery packs and other EV components. With a billion dollar headstart in the luxury EV space, Tesla appears to have noticed a demand for insurance plans that suit its cars. InsureMyTesla is reported to be a move to fill that gap.

“Tesla may provide a glimpse into a future where carmakers share the burden and costs of insuring vehicles with customers,” says BI Intelligence.

Self-driving cars will become the norm

BI Intelligence recently shared its report on the major pushes made by tech firms and their autonomous systems. It notes how tech giants have collectively knocked down the barriers that prevented self-driving cars form becoming a reality. It also highlights parts of the world where self-driving cars are most in use and where demand is rising.

BI Intelligence’s senior research analyst, John Greenough, fully looks at the current limitations set for self-driving cars. For instance, although California is praised as the first U.S. state to propose regulations for autonomous driving systems, laws stand firmly behind a driver being behind the wheel at all times. This has put ideas like Google and Uber’s driverless taxi venture on ice.

Tesla could land itself yet another headstart in the form of self-driving car insurance. Undersigned by large insurance firms, InsureMyTesla, will feature policies that offer the EV chargers, battery packs, and even provisions for EV replacement if the car is under 36 months old.

InsureMyTesla is already offered in select regions. Tesla is yet to publicly release a detailed price plan.

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