Tesla Motors Annoyed After AAA Raised Insurance Rates on Its Cars

Matt Posky
by Matt Posky
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tesla motors annoyed after aaa raised insurance rates on its cars

The American Automobile Association thinks Tesla cars should cost more to insure due to abnormally high claim frequencies and expenditures compared to similar vehicles. The group said premiums for Tesla’s Model X and Model S could increase by up to 30 percent, based primarily on data from the Highway Loss Data Institute. “Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates,” said Anthony Ptasznik, chief actuary of AAA.

Obviously, Tesla Motors isn’t pleased and is offering a rebuttal before other insurers follow in AAA’s footsteps.

“This analysis is severely flawed and is not reflective of reality,” the automaker said in a statement emailed to Automotive News. “Among other things, it compares Model S and X to cars that are not remotely peers, including even a Volvo station wagon.”

Tesla asserts that it is “false and misleading” to compare its products against vehicles like the XC70, specifying that the Model S held the lowest likelihood of injury, according to the National Highway Traffic Safety Administration. While that may be true, the Highway Loss report showed the Model S possessing a 46 percent higher claims rate than normal with repair bills over double the industry average.

The report places the car alongside other large luxury vehicles 90 to 110 cubic feet in length and between 3,500 and 4,500 pounds. Included in this group are models like the BMW 5 Series, Audi A6, and Mercedes-Benz E class — company Tesla says the Model S doesn’t belong with.

[Image: Tesla Motors]

Matt Posky
Matt Posky

Consumer advocate tracking industry trends, regulation, and the bitter-sweet nature of modern automotive tech. Research focused and gut driven.

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  • DeadWeight DeadWeight on Jun 04, 2017

    TTAC is LAME lately, with sparsely few articles, and few interesting ones. Get on the stick, Mark S, and make TTAC at least relatively interesting and thought-provoking again.* *Constructive criticism.

  • Spw Spw on Jun 05, 2017

    Doesnt Ferrari have much higher insurance costs? It would be beneficial for Tesla to be in lesser insurance category. The fact that data shows more costs for insurers is statistics, and no wordplay can change that. If it was lumped in higher category from the start, then rates would be higher from the start and they would complain how their cars belong to dofferent category. Additionally, what about autopilot? It is supposed to lower crashes by 50% according to IIHS stats? So without it Teslas would crash 2x more? Or is the systems autobrake worse than its peers? Both are troubling.

  • MrIcky MrIcky on Jun 05, 2017

    Actuary pool flunky #1: We need to rate teslas, let's google them and see what we can find out. *** Actuary pool flunky #2: Sounds good, I'll google them... *** Google results: Tesla vs Hellcat, Tesla vs Hellcat, Tesla vs Aventador, Tesla vs Hellcat, Tesla vs Rando Ferarri, Tesla vs Hellcat....... *** Actuary pool flunky #2: Hey, ummm, you might want to look at this.... *** I'm sort of laughing at Elon for whining about this too, seemed pretty predictable.

  • Stuki Stuki on Jun 05, 2017

    Sounds like Tesla can make a killing by starting an auto insurance company undercutting everyone else for Tesla insurance, if what he says is true.... It's not like Tesla couldn't use the money....

    • SPPPP SPPPP on Jun 06, 2017

      Hey, there you go. Now you're thinking like a Musk! Not only will Tesla's own inhouse insurance be cheaper because they have greater faith in Tesla, but their computers will be powered by SolarCity panels. Win-win! In fact, Tesla can just give all its owners free insurance, just like they give them free access to Supercharger stations (unless they don't, see Twitter for latest policy updates). No need to worry about pesky state regulations, those will get sorted out, just like lame dealer franchise "laws". And if all else fails, Musk can escape the bill collector using SpaceX rockets!