Tesla May Bring Big Change to Car Insurance

It plans to bundle it, and maintenance, into total price of car
By Elizabeth Armstrong Moore,  Newser Staff
Posted Feb 24, 2017 6:50 AM CST
Tesla May Bring Big Change to Car Insurance
Men look at the Tesla Model X during the media day of the 95th European Motor Show in Brussels on Friday, Jan. 13, 2017.   (AP Photo/Geert Vanden Wijngaert)

If cars are becoming safer as they incorporate self-driving features—the National Highway Traffic Safety Administration last month confirmed Tesla's first-gen Autopilot reduced Tesla vehicles' crash rate by 40%—consumers and experts alike are wondering when auto insurers will slash rates to reflect the minimized risk. Tesla CEO Elon Musk has already been vocal about this issue, and in a conference call with the press this week acknowledged that the company has already been quietly testing the idea of bundling insurance and routine maintenance into the upfront cost of its cars in Asia, reports Electrek. "It’s our vision in the future that we will be able to offer a single price for the car, maintenance, and insurance in a really compelling offering for the consumer," says the president of sales and services.

The announcement reveals just how confident Musk is in the increased safety and lowered maintenance of his fleet, reports Mashable. For the consumer, the lack of monthly insurance bills and unexpected repair costs means that the initial price tag is more meaningful, while Business Insider notes that insurers like Travelers and Mercury General have noted in SEC filings that driverless cars could threaten their business models. But fewer wrecks means fewer costly claims, not to mention saved lives. On the call, Musk sounded confident that insurance providers will eventually "adjust insurance costs proportionate to the risk of a Tesla." If not, he says, "We will in-source it." Mashable reports there's no word on what the bundle would cost. (See why Tesla is paying one driver $10,000 after he crashed his Tesla deliberately.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.