Tesla promises 30% lower rates with new insurance
By Caoimhe Toman
Date: Thursday 29 Aug 2019
(Sharecast News) - Electric carmaker Tesla announced on Wednesday the launch of an insurance product that the company said would deliver rates as much as 30% lower than those of its competitors.
For now, the product, known as Tesla Insurance, will only be available to car owners in California, although the company is already planning to roll it out in the rest of the country in the near future.
Tesla chief executive officer, Elon Musk, unveiled the new product back in April.
At the time, he said it would be "much more compelling than anything else out there."
Musk claimed that Tesla would be able to offer such vast discounts on insurance for its cars because of the company's access to the reams of data generated by each of its vehicles, in effect leveraging the "advanced technology, safety, and serviceability of our cars".
"We essentially have an [...] information arbitrage opportunity where we have direct knowledge of the risk profile of customers," Musk said in April.
"And then if they want to buy Tesla insurance, they would have to agree to not drive the car in a crazy way. Or they can, but then their insurance rates are higher."
Tesla insurance won't cover commercial services such as using the vehicle for ride-hailing or car-sharing services.
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