Tesla has finally announced his car insurance that teased CEO Elon Musk in April. The company describes it as "a competitively priced insurance offer designed to offer Tesla owners up to 20 percent lower rates, and in some cases even 30 percent." Tesla & # 39; s insurance will be available in California to begin with, and it will "expand to additional US states in the future," the company says, although no timetable was given.
Musk originally claimed that Tesla could offer such huge insurance discounts for its cars because the company has access to data streams each produces. In a blog post about the insurance product, Tesla says that the company's advanced safety features, such as Autopilot, also contribute to lower costs.
"We essentially have an … information arbitrage opportunity where we have direct knowledge of the risk profile of customers," Musk said in April. “And if they want to buy a Tesla insurance policy, they have to agree not to drive the car in a crazy way. Or they can, but then their insurance rates are higher. "
That said, Tesla explains that "it does not use or record vehicle data, such as GPS or camera images of vehicles, when determining insurance."
Lower-priced insurance may seem like a tempting offer, but the costs to insure Tesla's cars are already a bit higher than average; the Insurance Institute for Highway Safety ranked the Model S as the most expensive vehicle to insure in 2018.
Tesla promised existing customers in California the opportunity to purchase an insurance policy in "just one minute" on his website. New customers can also request a quote.
For Tesla, offering insurance policies offers the company another chance to reduce its margins while looking for sustainable profitability. But if Tesla ultimately has to pay too many claims, this can also deplete the company's cash reserves.