Electric vehicle (EV) company Tesla has been known for diversifying its endeavors. But in a new update, it’s also looking to roll out its auto insurance option across the US, one executive says.
The Palo Alto, California company already offers Tesla auto insurance in California, but according to Forbes, they’re also seeking permission from state regulators to roll out insurance plans in Illinois, Texas and Washington. Tesla Chief Financial Officer (CFO) Zachary Kirkhorn also said that the company will eventually roll the auto insurance out nationwide.
Fellow Tesla executive and CEO Elon Musk said in last year’s October earnings call that auto insurance could someday represent 30%-40% of the company’s entire auto business, claiming that Tesla was also building a “major insurance company.”
@elonmusk Will Tesla insurance be bundled with an Autopilot subscription in the future?
If nobody has thought of this you can send me some Tesla stock 🚀💎🙌
— Jorge Fernandez | jorgefer.eth (@jorgefer_io) March 12, 2021
Musk later said, “Obviously, somebody does not have to choose our insurance. But I think a lot of people will.” Musk continued, “It’s going to cost less and be better.”
In California, the only state in which Tesla currently offers insurance, State National Insurance Co. underwrites Tesla’s policies. After Tesla introduced its insurance in the state in 2019, State National saw over twice the industry average of consumer auto complaints against it, according to data collected by the National Association of Insurance Commissioners.
The new insurance will be tied directly to a given Tesla vehicle, which will allow the company to analyze the motorist’s risk using data collected from the car. This “pay-as-you-drive” or “usage-based” insurance isn’t currently being used, but rather, the company will use anonymized, aggregated data from its vehicles to set specific rates, rather than basing it off an individual’s driving.
