Tesla’s Insurance offering has been ordered to face a class action lawsuit by a California judge, reports Reuters.
The accusation centers on the claim that the company overcharged drivers for premiums, basing them on purportedly false crash warnings rather than actual driving behavior.
This decision came from Judge Brad Seligman of the Alameda County Superior Court in Oakland, California, who dismissed Tesla’s request to drop the consumer protection lawsuit filed under California’s comprehensive unfair competition law.
Despite the allegations, Tesla Insurance, headquartered in Fremont, California, denies any deceptive practices. In a partial victory for Tesla, Judge Seligman dismissed a breach of contract claim from the plaintiff, Illinois resident Ricky Stephens, but allowed an opportunity for amendment.
Stephens’ lawsuit, representing Tesla drivers from multiple states including Arizona, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia, raises serious concerns. He argues that Tesla’s safety score, a factor in determining insurance premiums, is affected by sporadic and random Forward Collision Warnings, even in the absence of actual danger. These warnings, he claims, are the result of Tesla vehicles’ still-developing sensor technology.
The lawsuit seeks restitution, disgorgement of profits, and an injunction against what it claims is false advertising. Stephens’ attorney emphasizes the need for an injunction to ensure Tesla’s advertising accuracy and to prevent the inclusion of non-existent driving events in their safety score calculations.
An initial hearing for the case, Ricky Stephens v. Tesla Insurance Services, is scheduled for January in the Alameda County Superior Court, under case number 23CV031800. Representatives for Tesla and Stephens’ attorney have not responded to requests for comments.
Tesla Insurance first launched back in 2019 and continues to expand to more states across the U.S.