What Really Happened to Tesla Auto Insurance–Why They Are Re-Tooling & Down

Yesterday, Tesla announced its new auto insurance and then yanked the whole program off the website within a few hours.  Almost as soon as the website went online Tesla owners were busy checking rates.  From Twitter posts and comments it appeared that Tesla’s insurance rates were in many cases more expensive than traditional insurers.

A Tesla blog post stated when insurance went live for the state of California, there would be discounts up to 20% – 30% because “the pricing reflects the benefits of Tesla’s active safety and advanced driver assistance features that come standard on all new Tesla vehicles.”

There were complaints that when the insurance rate it became higher then the initial quoate when they signed up for the service.

When Tesla filed it’s documents with the California Department of Insurance, they stated that insurance will be offered through State National Insurance Company, Inc. and use telematics data with customer permission. Discounts will be offered for some Tesla safety features. However, Musk warned during a company webcast that Tesla drivers “have to agree to not drive the car in a crazy way,” or, “they can, but then the insurance rate is higher.”

It was reported that Tesla insurance would not use vehicle data, however we are not able to corroborate that fact. However, we contacted the Tesla newsroom and learned.

“Tesla found a few bugs that were impacting the quoted rates for a subset of customer and we’re fixing those,”

The spokesperson stated in an email to AUTO Connected Car News. The company plans to bring Tesla Insurance back online as soon as possible with more competitive rates for those customers.

We recently researched insurance rates and one of the reasons why prices vary so much between different insurance companies is the data that they use. It is especially sparse for electric cars.  I personally had to change insurance carriers when I insurance an electric car because my previous insurance was going charge close to double the price I finally found.

When I asked 21st Century insurance why their rates were so much lower  I was told “Most of our customers are in California and we have more data on electric cars.”

Since the Tesla 3 has been on the market a relative short time—the data set not be as robust. Also the prices to fix Tesla’s are very expensive a little front fender dent cost almost $7,0000 to repair. Fenders can contain cameras and sensors that are very expensive to replace and calibrate.

Insurance is highly regulated in the state of California where credit scores can not be used in rating a customer which could have lead to pricing problems.

Does anyone have any other theories or experiences?  Please let us know in the comments below: