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• Tesla insurance is now available in eight US states.
• Musk wants to improve the customer experience and his own processes
• Buffett has doubts about the success of Tesla’s insurance
Tesla auto insurance in eight states
Tesla introduced in-house car insurance some time ago. After initially only Tesla drivers in the US state of California had access to the insurance service, the offer has now been extended to other states. Tesla owners in the states of Arizona, California, Colorado, Illinois, Ohio, Oregon, Texas and Virginia can now take advantage of Tesla’s insurance service. The US electric car maker also plans to be able to offer insurance to 80 percent of Tesla customers by the end of the year.
Musk promises that through his own insurance
During a conference call on Q1 2022 results, CEO Elon Musk told Reinsurance News that real-time feedback on Tesla customers’ driving habits is actually making them drive their cars more safely. The reason for this is that drivers are aware that their behavior behind the wheel has an impact on their insurance rate. CFO Zachary Kirkhorn also explains that with real-time data (the safety score), the company will try to do something good for its customers, save money and make the streets a little bit safer.
Musk also explained that internal insurance would help advance his own processes. For example, if an accident occurs, you can trace how it was caused and then determine how the car’s design or software can be changed to minimize the likelihood of such an accident. Accident repair must also be faster. “We fixed it right away. And that’s compared to having a fight with an insurance company and then a claims adjuster and then a repair shop. And that really can be a nightmare. So with Tesla Insurance, we’re trying to turn a nightmare into a dream’ explains Musk.
Warren Buffett Expresses Doubts About Automakers’ In-House Insurance Policies
Warren Buffett stated in 2019 that he had doubts about the electric carmaker’s insurance ambitions, as Market Insider reports. “I wouldn’t bet on any company in the auto industry being exceptionally successful in any way,” the top investor said at Berkshire’s 2019 annual meeting. Christopher Bloomstran, chairman of Semper Augustus Investments and a close supporter of Buffett, also said at a tweet on Twitter his doubts about Tesla’s insurance service:
I see a lot of student company writing and pitching. Most are better than yesterday’s $3,000 ARK Price Target Report for $TSLA. Reading the report, it is clear that the motivation is to promote a higher share price. The fantasy involved is simply spectacular… 1/
– Christopher Bloomstran (@ChrisBloomstran) March 20, 2021
For example, you doubt that the company has enough excess capital to take out insurance on a large scale.
E. Schmal/Finanzen.net Editorial Office
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