After a limited and frustrating start, Elon Musk is finally trying to revolutionize the auto insurance industry.
Tesla Insurance launched in Texas this week free from laws that have hampered its technology in California for the past two years.
The company, which hopes to expand to most other states next year, says Texas drivers won’t be judged on their credit, age, gender, or even their claims history. This could mean savings of up to 60% on their premiums.
While this number certainly requires attention, it also doesn’t mean that Tesla Insurance is automatically the right choice for you.
Are you part of the club?
From the outset, Tesla Insurance is only available for Tesla car owners, and there are no plans to change that.
The company says the reason it is offering lower rates in the first place is that it “uniquely understands its vehicles” and their “technology, safety and repair costs.”
If you don’t have a Model S, Model X, Model 3, Model Y, or Roadster, you’ll have to look elsewhere to find a big discount on auto insurance.
And while Musk plans to someday offer his in-house insurance worldwide, you might have a bit of a wait depending on where you live.
“The regulatory approval process for providing insurance is extremely slow and complex, varying widely from state to state,” he wrote on Twitter last month.
Why you might switch to Tesla Insurance
Electric cars generally cost more to repair or replace than their gas-guzzling counterparts. luxury electric vehicle, Teslas may be even more expensive.
Motortrend recently studied how much it would cost each year to insure the various models available from a traditional supplier. Among other factors, these averages assume the owner is a 40-year-old single male with a clean record and good credit rating:
Tesla model 3: $ 2,114 – $ 2,351
Tesla Model S: $ 3,673 – $ 4,143
Tesla Model Y: $ 2,118 – $ 2,227
Tesla Model X: $ 3,355 – $ 4,025
An average driver could save between 20% and 40% by switching, Tesla says, while some drivers could save between 30% and 60%.
The company says it can charge less because it trusts the advanced safety features of its cars – and the driving data it collects directly from your vehicle.
“Tesla uses specific features within the vehicle to gauge your premium based on your actual driving,” Tesla said in a statement. “You’ll make monthly payments based on your driving behavior instead of traditional factors like credit, age, gender, claims history and driving records used by other insurers. “
It’s actually a huge change. While many other insurers offer discounts if you install a tracking device and drive safely, they typically use this data. next to your credit, claims history and other factors to determine your rates.
Why some might switch to Tesla Insurance
While the company is enthusiastic about its use of data in Texas, California laws prohibit insurers from using behavior tracking technology to set auto insurance rates.
“We want to have the kind of real-time insurance where your insurance costs are based on your actual driving history, which is the right way to do it,” Musk said at an earlier shareholders meeting. this month. “So we are trying to get clearance from the regulators.”
For now, Tesla does not use individual car data and instead relies on anonymous information from a wide range of drivers.
That means a Tesla Model Driver in Cali will pay the same price as a daredevil who does hairpin turns and brakes at the last minute – assuming no one actually has an accident.
Tesla owners in the Golden State would be wise to compare quotes from multiple companies to make sure Tesla Insurance is always offering the best rate.
How all drivers can save on insurance
For most drivers in most states, saving 20% or 60% with Tesla insurance is just not an option. Fortunately, there are many ways that drivers can reduce their premiums, whether they live in Texas or Rhode Island, and own a Model S or a Toyota Corolla.
The first thing you can do is explore your options.
Insurers look at all kinds of risk factors in deciding your premiums, including your vehicle, driving record, zip code, and even marital status. And since each insurer uses their own formula, you could save a lot of money just by looking for multiple quotes.
If you haven’t compared quotes this year – or the past few years – you might be paying hundreds of dollars more than you need to. You can also use the same strategy to save on home and health insurance.
Another way to save money on auto insurance is to increase your credit score. In most states, insurers can use your credit information to help you set your premiums, and they view people with high debt as inherent risk takers.
The more debt you have, the more likely you are to pay a premium price for insurance, so try a few tactics to get out of debt faster.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.