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Tesla’s Insurance Is Trash: Report

Thanks to Elon Musk, Tesla always seems to over promise or under deliver to the point of telling tales out of school. It looks as if Tesla’s insurance is no different as an in depth report from Reuters shows.

Tesla first launched its in-house insurance in mid 2019. Musk of course touted features like low rates based on how Tesla owners drove, their use of the company’s AutoPilot and same-day collision repairs. This was all made better by surprisingly low monthly premiums.

The reality for customers however, was much different. Take Mark Bova for instance. He purchased a 2018 Model S earlier this year and purchased Tesla’s insurance before he left the dealership. Just over two weeks later, after using the car’s AutoPilot, it malfunctioned, lurching left, striking a median and flipping. Bova was injured and the car totaled. And dealing with Tesla’s insurance proved to be a nightmare.

Bova says he has been battling the insurer ever since the crash.

He said he waited seven months for payment on the totaled vehicle and still hasn’t been compensated for about $50,000 in medical expenses. That required a call to the automaker’s product liability department because the crash involved Autopilot, he was told. He waited on hold for hours and got hung up on four times, he said. When someone finally answered, the person promised a callback in two weeks. Four months later, he’s still waiting.

Bova isn’t alone in being dissatisfied with the insurance. Reuters spoke with dozens of Tesla Insurance customers who painted a picture of a company that’s difficult to deal with from the outside. One customer out of San Francisco described how it took 15 calls to try and get a hold of an adjuster after his daughter’s car was hit by a Tesla Insurance policyholder.

Meanwhile, adjusters were having trouble keeping up with the workload of trying to manage thousands of customers. Exact numbers on how many people Tesla covers aren’t available, but Reuters says the California Department of Insurance records show Tesla “insured more than 50,000 vehicles in the state” in late 2021, resulting in claims taking months.

Worse yet, Tesla Insurance has automatic rate hikes based on data gathered by their vehicle’s sensors. Called “Safety Scores” it uses real time vehicle data to analyze the driver’s behavior and charge accordingly. Because of this though, Tesla is currently facing two class action suits that claim that Tesla’s sensors are “producing false collision warnings that can lower the scores and inflate premiums.”

Chanda Santiago, a Tesla Insurance policyholder who is not involved in the litigation, told Reuters a similar story about safety-system malfunctions, including false warnings and spontaneous slamming of the brakes. Santiago, a Maryland real estate investor, said her monthly premium recently jumped nearly 50% to about $190.

“I’m not satisfied with how the safety score is calculated,” she said. “You’re grading me on something that’s not working properly.”

Santiago said she brought her 2020 Tesla Model 3 into service several times, but was told technicians couldn’t duplicate the problems or fix them. Once, she said, a technician didn’t wear a seat belt while driving the car – a no-no automatically detected by its safety systems.

“So I got dinged” on the safety score that day, she said.

Head on over to Reuters to read the rest of the report on just how bad Tesla’s insurance is.


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