I agree. ValuePenguin has an
article looking into possible ways the Tesla insurance could be cheaper, but I don't really buy it. Particularly the claim that they plan to repair the cars in-house to lower repairs costs seems far-fetched, given how overloaded the service centers already are. The Autopilot discounts are interesting, but if Autopilot actually reduces claims, that would also show up in the statistics that other insurance companies have.
Thanks for posting, and yes I concur with you.
Just had my D's Audi A3 repaired, and while the Bay Area body shop's list price was $145/hr, the insurer got them to accept $105. Other insurers use body shops with a contract rate of <$75/hr. Given labor costs in California (and required benefits), it's hard to see how Elon can squeeze much out of the major costs of the repair, which is labor.
Now, of course, Elon could eliminate the markup/profit on parts by selling the parts to the Tesla body shop at manufacturing costs, but that just means the Auto division makes less money so the insurance division can make more. (from the right pocket to the left?) But still, the costs are still there. Other autos can use after-market repair parts to save money. Tesla's cannot.
Yes, Tesla can eliminate commissions bcos they have no brokers, but then many other insurers already have a similar no-broker sales models, and built into their competive pricing models.
Like I said, just not seeing the value-add to make it worth the distraction of adding a new, disparate product.
But the more I think about it, perhaps this is just the first step for insuring RoboTaxis, which I'm guessing traditional insurers won't want to touch.