China reported 10.7k @Tesla insurance registrations(Telematics-Based Insurance, Safety Score Calculation, Tesla’s Entry into the Insurance Market, Tesla Repair Costs and Insurance Premiums, Tesla’s Price Competition in Insurance, Insurers Responding to Tesla’s Telematics, Tesla Insurance vs. National Average, Tesla vs. Audi Insurance Premiums, Tesla’s Insurance Disruption Potential, Impact on Other Automakers’ Insurance)
The study from MarketWatch suggests that Tesla’s innovative approach to insurance, using advanced telematics and its own proprietary software, has the potential to disrupt the insurance industry just as Tesla disrupted the automotive market. Here are the key points from the study:
On Roland Pircher posted that China reported 10.7k @Tesla insurance registrations.
1. Telematics-Based Insurance: Tesla uses advanced telematics to assess insurance risk for its customers. Through its proprietary software, the company calculates a Safety Score for each driver based on various driving behaviors, including following distance, aggressive turning, hard braking, seat belt use, driving speed, and Autopilot usage. This score ranges from 0 to 100, with higher scores resulting in lower insurance rates.
2. Tesla’s Entry into the Insurance Market: Tesla entered the insurance market in 2019 in response to customer complaints about high insurance costs for Tesla vehicles. Traditional insurance companies often cited the higher repair costs of Tesla cars, as well as the limited availability of Tesla-authorized repair shops, as reasons for higher premiums.
3. Repair Costs: While Tesla vehicles do have slightly higher average annual repair and maintenance costs compared to the average car, this does not fully justify the significantly higher insurance premiums that some Tesla owners were experiencing. The study found that insurance premiums for a Tesla Model S could be more than double the cost of insuring other vehicles.
4. Price Competition: Tesla’s use of comprehensive in-car sensors and software for telematics gives it a unique advantage in assessing insurance risk compared to traditional insurers that rely on third-party devices or mobile apps. As Tesla’s insurance offerings gain traction, it may put pressure on other insurers to compete on price and coverage. Additionally, the success of Tesla’s insurance model could encourage other automakers to enter the insurance market as well, potentially leading to lower insurance costs for Tesla and other electric vehicles.
5. Cost Comparison: The study compared the average annual insurance cost for a Tesla Model S to that of other vehicles. It found that a Model S could cost an average of $4,762 per year to insure for a 35-year-old driver with good credit and a clean driving record, while the national average for insurance is less than half that amount at $2,008. When comparing Tesla’s insurance premiums to those of similarly priced electric vehicles like the Audi e-tron Quattro Premium, Tesla’s premiums were still about 50% higher.
In summary, Tesla’s use of advanced telematics and its entry into the insurance market with competitive rates may disrupt the traditional insurance industry. This disruption could lead to increased price competition among insurers and potentially encourage other automakers to offer insurance as well, ultimately benefiting Tesla owners and electric vehicle enthusiasts.
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