When Tesla launched its insurance product it described it as a “competitively priced insurance offering designed to provide Tesla owners with up to 20% lower rates, and in some cases as much as 30 percent”.
Initially the product was available in California with the promise that would be expanded to additional US states in the future.
Tesla has now delivered on that promise as the company is now selling insurance to customers in Texas.
But the version in Texas is different.
The company says it will evaluate driving behaviour in real-time using the “Safety Score” feature that it recently launched to screen drivers who want to join the beta test of the company’s “Full Self-Driving” beta software.
That means drivers might wind up paying less — or more — per month based on how many forward collision warnings they rack up, how hard they brake, how “aggressively” they turn, how much distance they leave to the car in front, and whether they keep their hands on the wheel when using Autopilot.
Tesla used some driving behaviour metrics to develop premiums in California, but they were not real-time and relied more on statistical evaluations.
The offering in Texas represents a big break from how other insurance companies arrive at their quoted premiums.
Even ones that rely on data from telematics dongles plugged into a car still consider other factors like age.
Tesla is, unsurprisingly, promoting those differences.
The company claims owners could pay premiums that are anywhere between 20% and 60% cheaper than the competition if they opt to use Tesla’s insurance.
While other insurance providers relentlessly promote that they offer lower rates to safer drivers, the new version of Tesla’s insurance product could offer the most tangible version of that promise, as long as it works as advertised.
The Tesla insurance product marks an important tech challenge to the insurance industry.
It will be interesting to watch how it influences changes within the sector.