LOADING

Elon Musk speaks out against AAA and other insurers thinking of raising Tesla rates

By SmartCoverage Team on June 8th, 2017

Elon Musk has a simple message for any Tesla owners who have been or will be affected by a brand-based insurance premium hike. "Switch," said Musk, speaking at Tesla's annual stockholder's meeting.

 

"Somewhat randomly, Southern California hugely increased insurance premiums. There is a simple solution, change your insurance provider."

 

The specific insurer that made the initial move to raise Tesla premiums is AAA - The Auto Club Group, who will be raising them by as much as 30 per cent. It is an action that was reportedly determined based primarily on data from the Highway Loss Data Institute.

 

"Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates," said Anthony Ptasznik, chief actuary of AAA - The Auto Club Group.

 

"Teslas get into a lot of crashes and are costly to repair afterward," said Russs Rader, spokesman for the Insurance Institute of Highway safety, the parent organization of the Highway Loss Data Institute.

 

Musk, however, begs to differ. He defended his vehicles from a safety and structural perspective, citing their computerized emergency braking systems and crumple zones that are longer than that of standard vehicles and designed to absorb kinetic energy during collisions.

 

"The safety is not just good for people in the car, it actually helps if you do have a collision with another car," explained Musk.

 

At present, no other large insurance companies have joined AAA - The Auto Club Group in raising Tesla premiums. However, many of them factor in claims data in similar ways as AAA, and could perhaps come to take that same stance going forward.

 

 

Share on social media