Electric automaker Tesla is entering a new space: auto insurance. CEO Elon Musk announced on Wednesday during the automaker's Q1 2019 earnings call that Tesla will offer in "insurance product" beginning in about a month.
Insuring a Tesla isn't cheap. It is one of the largest complaints of many new owners, who do not expect a policy of a Tesla Model 3 to cost as much as a brand new Porsche 911 in some markets.
"It will be much more compelling than anything else out there, "says Musk.
Documents show that" Tesla Insurance Services, Inc. "has been incorporated since June 2017, indicating that Tesla has been planning to make this move for some time, but has just now made the announcement that it is readying the service for the public. Two forms of Tesla employees are listed as the corporation's directors; Deepak Ahuja and General Council CFO, Todd Maron.
Tesla built its notoriety by offering the latest in technology to consumers, and the latest updates to the car applied completely. All these perks mean that Tesla's had direct access to a large amount of telemetric data about its cars and also its drivers.
Musk says this is "help with rates," which has been an ongoing issue for many Tesla drivers as insurance companies for rates and premium segments. But as Tesla launches its own insurance product, it also confirms that Tesla will use this information to determine its own rates.
Musk confirms that Tesla has "direct knowledge of the risk profile of customers based on the car," Musk said, adding that this provides the automaker with an "arbitrage opportunity" based on the customer risk profile. So, if a customer wants to purchase Tesla insurance, they can do so and drive in and respectable less. But drive in a "crazy way" (like Musk puts it), and "the insurance rate is higher."
The idea of profile-based insurances rates is far from new. since 1
The data that passes through and OBDII port is minuscule compared to the data that can be collected by Tesla. he occupant is doing at all times. Musk has said on Twitter that the camera will be used to drive his car in Tesla's upcoming autonomous taxi fleet.
Tesla's always-connected approach means that the mothership can be beamed back for information about that time you decided to turn off autopilot or mash the gas. With stop sign and traffic signal detection, it could (theoretically) tell when you skirt those yellow lights or perform a California roll at a stop sign. The purpose of big data is to take action without review – so build a big enough reputation for at-risk driving and rates could go up without human interaction.
Driver monitoring to this capacity could be a legitimate concern for some drivers, while Others might not mind the thought of being scrutinized for every turn of the wheel and press of a pedal. Regardless, finding an appropriate middle ground between extremely high insurance rates and proper driver assessment is a very real conundrum that Tesla is looking to solve.