Tesla Looking to Expand Its Insurance Offerings in the United States
Tesla intends to expand its vehicle insurance offerings into two additional states. They are Oregon and Virginia.
Tesla Insurance has the potential to become America’s largest automobile insurance company. Elon Musk, CEO of Tesla, stated in 2020 that auto insurance might account for 30% to 40% of the company’s automotive revenue.
Musk also discussed how Tesla is positioned well to engage in the insurance market, emphasizing the company’s superior feedback loop rather than choosing to be quantitative like other insurers.
Advantages of Tesla’s Insurance Initiative
Tesla Inc. as a whole obtains knowledge into the repair expenses of its vehicles thanks to Tesla Insurance, also known as the feedback loop Musk has been referring to. These observations then allow Tesla to make adjustments to its procedures and even car design making them more accessible and cheaper to fix, thus, helping Tesla’s customers save money in the long term.
Tesla also has the benefit of fully utilizing the telematics currently built into its own vehicles, Musk said during the quarterly earnings call.
Current Standing of Tesla’s Vehicular Insurance
Tesla presently sells its insurance products in Arizona, California, Illinois, Ohio, and Texas, where it initially debuted its pilot insurance program that records customers’ driver behavior to establish prices.
The “safety scores” created by Tesla using the onboard telematics systems in its vehicles are accessible for drivers to examine and employ in setting insurance rates in Arizona, Illinois, Ohio, and Texas.
California rules, however, do not yet allow the usage of telematics data for insurance. Tesla says drivers with higher safety ratings might save 20% – 60% on their vehicle insurance expenses.
According to Forbes, Tesla’s insurance coverage in Oregon and Virginia would be underwritten by its in-house insurance firm, Tesla General Insurance. It comes as a complete departure from its past insurance offers in other jurisdictions. Previously, the electric vehicle manufacturer collaborated with other insurance firms to provide coverage.
Tesla has already filed papers with Washington state officials but has yet to begin selling insurance in the region.
Tesla CFO Zachary Kirkhorn stated on an earnings teleconference earlier this year that the company intends to ultimately roll out vehicle insurance worldwide. He also stated that Tesla plans to have insurance in several fields.
Tesla’s insurance expansion stands to enable 80% of the company’s customers to purchase their vehicle insurance from Tesla itself.