Tesla (NASDAQ:TSLA) launches insurance in California, promising savings and no snooping
Tesla Inc. said late Wednesday it has launched an insurance product, promising hefty savings and no snooping for owners of its vehicles in California.
Tesla Insurance is “designed to provide Tesla vehicle owners with up to 20% lower rates, and in some cases as much as 30%,” the company said in a blog post.
It offers comprehensive coverage and claims management, and eventually will expand to other states, Tesla said. The insurance is available to cover all Tesla vehicles.
Tesla TSLA, +0.71% is able to offer lower rates because it “uniquely understands its vehicles, technology, safety and repair costs,” it takes into account the company’s suite of advanced driver-assistance features, and will cut fees taken by traditional insurance carriers, Tesla said.
Costs will vary, based on a driver’s record and other factors that usually impact a person’s insurance rates, Tesla said.
The company will not use driver data, such as GPS or vehicle camera footage, to price the policies, it said.
For now, Tesla Insurance will cover only personal use of a vehicle; in the future, in keeping with the company’s hopes of having a robo-taxi network, Tesla plans to offer commercial insurance, it said.
Chief Executive Elon Musk promised in April to launch the insurance product, saying then it would take about a month. In June, Musk said Tesla needed to complete a “small acquisition” before launching it.
The idea has been criticized by a few analysts and from legendary investor Warren Buffett, who has expressed doubt it would upend the auto insurance business, but Musk promised a product “much more compelling than everything else out there.”
Tesla shares inched higher on Wednesday, but are down more than 35% this year. That contrasts with gains of 15% for the S&P 500 index SPX, +0.65% and 12% for the Dow Jones Industrial Average DJIA, +1.00% in the same period.
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