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As he has done with the electric car industry, Elon Musk aims to revolutionize insurance – and he will do it one state at a time, if he has to.
The maverick recently announced plans to bring its discounted auto insurance to Texas later this month and New York next year before expanding to more states and even internationally. .
Tesla Insurance is already available in California, and the company says drivers who switch save Up to 30%, which can amount to hundreds of dollars a year.
While this number certainly requires attention, it also doesn’t mean that Tesla Insurance is automatically the right choice for you.
Are you part of the club?
From the outset, Tesla Insurance is only available for Tesla car owners, and there are no plans to change that.
The company says the reason it offers lower rates in the first place is that it “uniquely understands its vehicles” and their “technology, safety and repair costs.”
If you don’t have a Model S, Model X, Model 3, Model Y, or Roadster, you’ll have to look elsewhere to find a big discount on auto insurance.
And while Musk plans to someday offer his in-house insurance worldwide, he admits it’s been slow so far. The company is also working to enter Illinois and Washington, according to media reports.
“The regulatory approval process for offering insurance is extremely slow and complex, varying widely from state to state,” he wrote on Twitter last month.
So even if you are a luxury EV driver who would benefit from switching to Tesla insurance, it may take a long time before you can enjoy it.
Why you might switch to Tesla Insurance
Electric cars generally cost more to repair or replace than their gas-guzzling counterparts. luxury electric vehicle, Teslas may be even more expensive.
Motortrend recently investigated how much it would cost each year to insure the different models available. Among other factors, these averages assume the owner is a 40-year-old single male with a clean record and good credit rating:
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Tesla model 3: $ 2,114 to $ 2,351
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Tesla Model S: $ 3,673 – $ 4,143
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Tesla Model Y: $ 2,118 to $ 2,227
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Tesla Model X: $ 3,355 to $ 4,025
Of course, rates vary widely from person to person, location to location, and insurer to insurer, which is why you should always compare quotes from multiple companies.
Tesla Insurance claims it charges less than the average insurer because it trusts the advanced safety features of its cars. Plus, it has access to a wealth of data to back up that confidence, harvested from the active safety and driver assistance features that are standard in all of its new cars.
The company says it also has an easier time sourcing and repairing the expensive parts that make up its electric vehicles.
As for special features? In addition to the standard coverage options, Tesla offers an “Autonomous Vehicle Protection Package” that protects you from liability when the car is on autopilot.
Why you might pass on Tesla Insurance
While the company is enthusiastic about its use of data, Tesla Insurance only uses anonymous information from a wide range of drivers.
“Tesla Insurance does not currently use data from individual vehicles, such as GPS or images from vehicle cameras,” the company said. “We plan to expand product offerings to incorporate more types of data over time. “
This is a strange omission, given that many traditional insurers already offer discounts based on sustained driving habits. This means that safer drivers are not yet able to directly benefit from their driving habits.
For now, a Tesla driver has to pay the same price as a daredevil who hammers the accelerator, makes hairpin turns and brakes at the last minute, i.e. assuming that no one really has an accident.
Tesla Insurance also does not cover carpooling work or any other activity that requires a commercial insurance policy. So if you plan to recoup some of the cost of your car by driving for Uber or Lyft, you cannot do so with Tesla Insurance yet.
How all drivers can save on insurance
For most drivers in most states, saving 20% or 30% with Tesla insurance is just not an option. Fortunately, there are many ways that drivers can reduce their premiums, whether they live in California or Wyoming, and own a Model S or a Toyota Corolla.
The first thing you can do is explore your options. Even if you have access to Tesla Insurance, it might not automatically be the cheapest option for you.
Insurers look at all kinds of risk factors in deciding your premiums, including your vehicle, driving record, zip code, and even marital status. And since each insurer uses their own formula, you could save a lot of money just by looking for multiple quotes.
If you haven’t compared quotes this year – or the past few years – you might be paying hundreds of dollars more than you need to. You can also use the same strategy to save on home and health insurance.
Another way to save money on auto insurance is to increase your credit score. In most states, insurers can use your credit information to help you set your premiums, and they view people with high debt as inherent risk takers.
The more debt you have, the more likely you’ll be paying a premium price for insurance, so try a few tactics to get out of debt faster.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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