AAA premiums: 30 percent rise

[Canuck]

If you look at the stats for all major insurers, their money is made from return on equity (ROE) which they make from underwriting (selling policies) or investing their reserves. The underwriting ROE is usually a very small profit, flat or even at a loss in certain sectors, but the insurers are making money on their investing ROE, and some significantly given recent markets including rising property values.

As I see it, Tesla owners are simply an easy target for an increase. I wouldn't look any deeper at the cause since all the Tesla policy premiums do not even count for 0.001% of that insurer's profits.

 

[ecarfan]

according to to the National Highway Loss Data Institute, both the Mode S and Model X are involved in significantly more accidents and cost more to repair. The Model S is involved in 46% more collisions than the average large luxury vehicle, and cost twice as much to repair. The Model X is involved in 41% more collisions and costs 89% more to repair

I can understand the higher repair cost but I am unclear on why the S/X would be involved in so many more collisions than comparable cars.

As @mspohr correctly pointed out, Elon claimed that the AP cars were 40% less likely to be involved in collisions that caused the airbags to go off, regardless of whether AP was engaged or not. So those are at least moderately severe collisions.

But 41 to 46% more collisions of any type? Are Tesla drivers more reckless on average? Are they getting into more minor scrapes due to the car being larger than they are used to? I don't know.

 

[Tam]

Whoa! That makes the non-AP Teslas look really bad!...

That's what so unique about Tesla.

In order to defend one, it would beat up another one of its very own

That's similar to bad-mouthing about Model 3 in order to sell more Model S

 

[Tam]

...Are Tesla drivers more reckless on average?...

Tesla may focus on injuries and when airbag is deployed but not minor crashes.

But minor crashes can be very expensive such as from the lawsuit from Korean actor Ji Chang Son as the car crashes through the garage wall into the living room:

The lawsuit falsely believes that Tesla is so safe, its Automatic Emergency Braking so wonderful, its high tech is so amazing that such a crash can never be possible.

Tesla drivers may not be reckless but once I am in a Tesla cult, how can I be cured from false belief?

 

[boonedocks]

Maybe AAA is taking in to account that many of the safety features are either just now coming on line, "in recent firmware updates" and they are not fully baked yet. ie AEB finally available on HW2 cars over a year after the hardware was released and then at a low MPH threshold. I believe other safety features like side collision were also just recently made available. My hope is when the software is finally made available in all of its glory to the end user that a full suite of re-tests will be done to bring things closer to Elon's claims.

 

[chillaban]

AEB is only part of what causes collision claims though. It won't stop you from scraping your rims, hitting poles in parking garages trying to park the car, open your FWD into a metal ceiling pipe, and other minor but relatively costly repairs because a Tesla is not a Volvo stationwagon.

I think we don't want to hear it, but it's inevitably true: Some of the crazy rates that you guys are getting are lower than the rates for my fully-loaded 2011 Audi A4, and that's crazy, because Teslas are safe and have a lot of great automation but none of that forms a magical protective bubble around the car. It's an expensive car to repair, and being such a nice car, people will want to repair almost any sort of damage that happens to it, unlike a Volvo stationwagon (no offense). It is a $100k+ car for many of us and it will probably end up costing like that to insure.

 

[Ben1975]

At this point only the wealthier people can afford Teslas. A more expensive insurance premium is just part of the deal.

 

[stopcrazypp]

Whoa! That makes the non-AP Teslas look really bad! Let's say, X is non-AP Tesla claim rate, Y is comparable cars' claim rate. Let's also say, 50% of 2014-2016 Model S were AP in the study.
So, we have: For Model S : (X + 0.6X)/2 = 1.46Y => X = 1.825Y => pre-AP Model S was 82% more accident prone
For Model X (only AP cars): 0.6X = 1.41Y => X = 2.35Y => 135% more accident prone, IF Model X didn't have AP.

Either something is wrong with this 40% claim, or these pre-AP cars had very bad accident rate (terrible drivers, terrible cars or both). Or the AAA data has some flaw (least likely, imho).



You replied to my statement with 2 parts: claim rate and insurance cost. Yes, the presumed rich current Tesla buyers may not care about insurance costs. But they usually care more about safety; i.e. claim/accident rate.

Not even close. You are trying too hard to spin things into a negative as much as possible.

Here's the two relevant quotes:
"Figure 11 shows the rates calculated by ODI [Office of Defects Investigations] for airbag deployment crashes in the subject Tesla vehicles before and after Autosteer installation. The data show that the Tesla vehicles crash rate dropped by almost 40 percent after Autosteer installation."

"Model X file for claims 41 percent more often than average, and those claims cost 89 percent more than average, according to the institute."

1) The 40% figure only counts airbag deployment crashes. Obviously many crashes/accidents do not involve airbag deployment.
2) The insurance figures only count claims, not the amount of accidents. There are plenty of accidents where claims are not filed because they are under the deductible, sufficiently close, or the owner didn't have collision coverage for their own car.

There's a couple of factors that could increase claim rate independently from accident rate. For example, high repair costs would raise a similar accident to over the deductible, while another car might still be under. Also, being a premium car, with many being quite new, it is less likely for the owner to go the cheap route out of pocket. Being a niche car with less available shops also reduces the possibility of going cheap.

 

[kort677]

At this point only the wealthier people can afford Teslas. A more expensive insurance premium is just part of the deal.

I see it as just another incentive to do whatever it takes to attain financial success

 

[Tam]

At this point only the wealthier people can afford Teslas. A more expensive insurance premium is just part of the deal.

I am pretty much used to Tesla talk.

It usually paints a very positive picture but it's more likely about what the future will be, not right now.

Eventually, you can summon your car from across the continent but who knows when.

Eventually, Tesla cars will be so good at dodging collisions including minor scrapes and the insurance rate will be so low that Tesla will even sell you a car insurance policy too.... But that's in an unknown future and not right now.

 

[kort677]

I am pretty much used to Tesla talk.

It usually paints a very positive picture but it's more likely about what the future will be, not right now.

Eventually, you can summon your car from across the continent but who knows when.

Eventually, Tesla cars will be so good at dodging collisions including minor scrapes and the insurance rate will be so low that Tesla will even sell you a car insurance policy too.... But that's in an unknown future and not right now.

fwiw: insurance companies don't deal in "eventuallys" they deal in reality and their exposure to the cost of claims.
I won't even begin to discuss the the eventual possibilities that you offered and when and if they'll ever come to pass.

 

[Tam]

In today's 2017 Annual Meeting of Stockholders, Elon Musk advised to change your insurance carrier if they raise your premium because according to his poll, the premium for a Tesla is about 5% lower than a comparable car and if you shop around, you can get about 25-30% less.

 

[mspohr]

In today's 2017 Annual Meeting of Stockholders, Elon Musk advised to change your insurance carrier if they raise your premium because according to his poll, the premium for a Tesla is about 5% lower than a comparable car and if you shop around, you can get about 25-30% less.

I have AAA insurance and plan to change. I've already found one much better quote.
A recent study showed that people who stay with the same insurance company year after year are suckers. They end up paying much more for insurance.

 

[boonedocks]

I have AAA insurance and plan to change. I've already found one much better quote.
A recent study showed that people who stay with the same insurance company year after year are suckers. They end up paying much more for insurance.

+1 to that.... I was a 16 year old to 45 year old State Farm customer and near the end of that relationship I found an independent insurance broker and discovered how true that "A recent study showed that people who stay with the same insurance company year after year are suckers" really is.

 

[Tam]

Looks like someone is agreeing with AAA's assessment:

IIHS says Tesla electric cars have higher miles, more costly repairs

 

[Korex]

I have purchased Model S partly due to my wife's daily commute route being around 55 miles, which would save me about 200$ a month on fuel compared to her current 2016 Lexus , but after adding TESLA to my GEICO policy my premium went up 800$ for the 6month policy, so fuel saving is vanished now! Maybe Tesla need to add a column on a website when you about to order a car, which will show not only how much will you save on gas over 5 years but also how much will you lose on insurance premiums! Still, love the car, but not much saving in owning TESLA, except maybe we save a Planet a bit and make the commute for cyclists - better! I live in Portland area, so cycling is a big thing!

 

[djplong]

I shopped around when AAA (my current insurer) said they were putting a surcharge on Teslas.

I insure 3 vehicles - my 2002 Camry, my wife's 2000 Camry and her 2003 Grand Caravan.

Replacing my 2002 Camry with a 2018 Tesla and going with Progressive versus AAA, it turns out my premiums will be going DOWN a little!

 

[mspohr]

I have purchased Model S partly due to my wife's daily commute route being around 55 miles, which would save me about 200$ a month on fuel compared to her current 2016 Lexus , but after adding TESLA to my GEICO policy my premium went up 800$ for the 6month policy, so fuel saving is vanished now! Maybe Tesla need to add a column on a website when you about to order a car, which will show not only how much will you save on gas over 5 years but also how much will you lose on insurance premiums! Still, love the car, but not much saving in owning TESLA, except maybe we save a Planet a bit and make the commute for cyclists - better! I live in Portland area, so cycling is a big thing!

You must shop at least ten companies. I used to have AAA but found cheaper insurance.

 

[BLUEBOLT X]

Speaking of AEB, I haven't really noticed that this works on my Model X - I'm too chicken to actually test it.
Any comments on this would be greatly appreciated.

 

[Tam]

...I'm too chicken to actually test it...

Please don't test it!

Owner's Manual is very clear that Tesla AEB does not apply brake to a complete stop. The best it can do is to reduce the speed so you can have a less forceful collision. But a collision is still a collision!

I don't even know for sure whether AEB have been reliably activating brakes in all collisions either such as in 2 documented autopilot deaths (2016 Florida and 2018 Mountain View.)