Insurance Tech

Tesla Launches New Insurance Program With Surveillance-based Rating

Tesla Launches New Insurance Program With Surveillance-based Rating

Tesla is formally launching a comparable option to clients in its new home state of Texas, after two years of supplying auto insurance to drivers across California. The major distinction, as reported by Electrek, is how drivers’ premiums are calculated; in California, pricing is largely determined by statistical evaluations, while in Texas, insurance prices will be estimated in real-time depending on the drivers’ habits.

Tesla claims to score this conduct using the “Safety Score” feature, an in-house methodology developed by the firm to predict a driver’s likelihood of a future collision. These scores were recently released to screen drivers who were interested in testing out Tesla’s “Full Self Driving” software, which is still in development, like the Safety Score. While the self-driving software release date remains uncertain for the time being, Tesla drivers in Texas can apply for rates on Tesla’s website using their safety score.

Tesla CEO, Elon Musk made this known at the company’s annual shareholder’s meeting, saying basing insurance premiums on “your actual driving history is the correct way to do it. In California, we’re going to upgrade the version because we want to have the same kind of real-time insurance, hopefully, we’ll have most of the country next year – that’s our aspirational objective,” he explained . And due to the many laws and filings needed by different jurisdictions, Musk described car insurance as a “regulatory labyrinth.”

Related:  Kate Levett Is Promoted to the Position of Head of Market Management

Tesla, as it points out in its documentation, is an oddity in the car insurance industry since it relies on a single score. Most traditional insurers round up a driver’s prices based on several characteristics that are entirely irrelevant to their actual driving such as age, gender, occupation, and credit score, all play a role in determining how much a person’s insurance might cost, depending on the state.

While Tesla, uses a single score consisting of five variables, ranging from the number of forward-collision warnings a driver receives every 1,000 miles, the number of times you “hard brake,” how often you take too-fast turns, how closely you drive behind other drivers, and how often they take their hands off the wheel when Autopilot is engaged.

Tesla Model S, Model 3, Model X, and Model Y owners in Texas can now take advantage of this new insurance program. Tesla expects the formula to change in the future as it learns more about its customers and data.

The Author

Ajisebutu Doyinsola

Doyinsola Ajisebutu is a journalist and prolific writer who takes a special interest in Finance, Insurance, and the Tech world.