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Why is Tesla selling insurance and what does it mean for drivers?

In the past year, Elon Musk and Tesla have fascinated the world with new innovations like the Tesla Cybertruck. There is excitement about most new Tesla products, but one hugely important one has been largely overlooked.

Article first published in The Conversation.

With far less fanfare and no stage performance by Musk, Tesla started offering car insurance last September. In the long run, this is going to have a major impact on most of our lives – perhaps even greater than Tesla’s more eye-catching innovations.

Tesla Insurance is only available for Tesla vehicles in some states of the US at present. It will expand the number of territories gradually over time. But as with the Tesla Cybertruck, the company first wants to see how the business holds up to whatever is thrown at it and whether it cracks under pressure.

For those eligible for Tesla Insurance, the company claims to offer premiums 20% to 30% lower than rivals. Yet even if you are in an area where you can request a quote, Tesla won’t necessarily make you an offer. It sometimes still refers drivers to a traditional insurance partner instead. It may be that Tesla chooses the clearer, less risky cases and sends more complex ones to insurers with more experience and appetite to handle them.

So why is Tesla selling car insurance? 

Dr Alex Zarifis, of the School of Business and Economics, looks to provide some answers in his article for the Conversation. Read it here

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Press release reference number: 20/13

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