Tesla: its insurance policy coming up

“It will be more compelling than any other already existing product in the industry” according to Elon Musk. Tesla holds an outstanding opportunity on the market, namely to collect driving data and create a driver risk profile much closer to the truth than those generated by insurers

09 May 2019

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Tesla could launch an insurance product related to the automotive sector within a month: Elon Musk, the CEO of the company, gave the message directly during a conference with analysts to present the first quarter results. In the opinion of Tesla’s founder, the car insurance being developed will be “more attractive than any other product” already existing in this sector. 

Musk did not provide further details, even if it seems that the insurance includes discounts and benefits for vehicles fitted with Autopilot, the Tesla automatic driving system that the company already shares with the American insurance networks, which therefore can already adapt the premiums accordingly. Musk has also guaranteed the same information (i.e. whether or not Autopilot is present) “will be included in the premiums for our insurance product, to be launched next month”. 

On the other hand, Tesla has an unprecedented possibility on the market, namely to collect and analyse driving data, thereby creating a driver risk profile much more consistent with the actual situation than those generated by current insurance carrier algorithms. However, privacy issues may arise: Mr. Musk has openly said that customers choosing Tesla insurance may have to be committed “not to drive a car like nuts” (and if they did, they would be immediately discovered) in order to access lower premiums. 

To be truly “disruptive” as Musk said, however, the new insurance product must also have other features: policies that allow access to discounts in case of Autopilot are in fact already on the market (for example, the startup Root offers a similar product).  It should also be different from a simple all-inclusive insurance covering the damages of a Tesla owner in case of accident: such a product was already launched in 2017 by Tesla in partnership with the Liberty Mutual company. 

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Due menzioni speciali al premio di giornalismo M.G. Cutuli, vincitrice del Premio Giuseppe Sciacca 2009, collabora con testate nazionali. Per InsuranceUp ed EconomyUp si occupa di startup, innovazione digitale, social network.

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