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At least one national insurer, AAA, is raising rates on Tesla vehicles based on data showing that the Model S and Model X had abnormally high claim frequencies and high costs of insurance claims compared with other cars in the same classes.
AAA said premiums for Tesla vehicles could go up 30 percent based on data from the Highway Loss Data Institute and other sources.
Tesla is disputing the analysis.
"This analysis is severely flawed and is not reflective of reality," the electric-vehicle maker 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."
Anthony Ptasznik, chief actuary of AAA, said the group noticed the anomaly in company data and then investigated other data sources, primarily relying on the Highway Loss Data Institute because of its scope, to confirm its analysis. "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," he said.
Other large insurance companies, including State Farm and Geico, said that claims data is a major factor in calculating premiums, but would not disclose if their Tesla-owning customers would also see rates rise.
-- submitted from IRC
(Score: 2) by LoRdTAW on Wednesday June 07 2017, @01:31PM (7 children)
My conspiracy theory goes like this:
The teslas have proven to be safe, reliable vehicles. Good for insurance companies. Even better if they can somehow claim that they are less reliable, jack up rates and rake in the dough. Overall the teslas cost less to insure in the long run and their owners have deeper pockets. So they can make much more money in the long run by setting false precedent that they are less safe.
(Score: 3, Interesting) by fishybell on Wednesday June 07 2017, @01:59PM (1 child)
Safety and insurance rates have, unfortunately, almost nothing to do with each other.
Insurance rates for a specific model of car in a specific area to a specific driver are determined by average costs for that car/area/driver demographic.
Just because a car is the least likely to kill or injure you doesn't necessarily mean it will cost less to insure. If people drive the super-safe car like they're in a demolition derby, crashing into every moving and stationary object they can find, then that car will have a higher insurance rate. It doesn't matter that no one got killed or injured, but that the car got banged up and the costs to fix it are high. It's the same reason why so many sporty cars like the Subaru WRX cost extravagant rates: people drive them like they stole them. I imagine it's the same problem here; Teslas are very, very sporty and their owners drive them as such.
(Score: 2) by DannyB on Wednesday June 07 2017, @07:52PM
I assume you read that this is about Tealas and not BMW drivers?
What doesn't kill me makes me weaker for next time.
(Score: 3, Insightful) by AthanasiusKircher on Wednesday June 07 2017, @02:06PM (3 children)
I'll admit with the difficulties Tesla has suffered over the years (particularly trying to get around dealership laws) that I've occasionally wondered about the excess amount of negative press and whether some stories weren't pushed by interests with opposing agendas. On the other hand, Tesla and Musk have continuously courted media coverage, and when you do so, you get more press coverage -- and that includes bad stuff.
But I have more difficulty believing in some sort of massive conspiracy here. It would make sense if car insurance was a monopoly business. But it's not. AAA is just one insurer. If they offer bad rates to Tesla owners, why would ALL other insurers follow? As I understand it (not being a Tesla owner), Tesla has a pretty well-established "community" compared to other random car makes. What's preventing another insurance company from offering lower, more reasonable rates -- a fact that will likely spread well within the community and thus lead to a lot of Tesla owners shifting their business to that company?
Or are you positing that other manufacturers hate Telsa SO much that they are all conspiring to pay off ALL the insurance companies to make it worth their while to not respond to market forces like this? What's the motivation for the insurers here? If this were happening, it's not like car manufacturers could somehow say to insurers, "we'll send your company more business if you do this" (somehow) -- because they'd need to be "bribing" ALL the insurers.
So ALL the car insurers take part in some convoluted scheme and risk legal charges for collusion -- just to screw over a TINY fraction of car owners? Really??
I understand why the dealerships wanted to undermine Tesla's sales model, because it could theoretically put their entire business model in jeopardy. But why would insurers all do this? It makes no sense.
(Score: 4, Interesting) by Phoenix666 on Wednesday June 07 2017, @03:32PM (2 children)
They don't have to pay off all the insurance companies to produce this article or announcement. I did not claim they had. I said I take announcements with a grain of salt now because it's not the first time damning claims have been made about the cars and the company, and were quickly proven false.
But specifically to your point, the New York Times hatchet job might be the best one to look at. The entire New York Times does not appear to have been conspiring to smear Tesla, but its reviewer John Broder certainly was; the telemetry from the car showed he was lying in his review and was actively trying to get the car to break down, which it never actually did. Why he was preparing a hatchet job was never established (as far as I'm aware), but it's a fact he did, and he did it under the rubric of the New York Times, using their credibility to give his hatchet job more authority.
In other words, it does not take the collusion of every insurance company to produce an article like this. All you need is one guy to supply a juicy quote: "'Teslas get into a lot of crashes and are costly to repair afterward,' said Russ Rader, spokesman for the Insurance Institute for Highway Safety" and a reporter, Katie Burke, at a trade publication called Automotive News to create a narrative around that quote to try to manufacture a perception.
So there might be a legitimate basis to this rate hike. It could be on the up-and-up. Tesla is not perfect. But for me the burden of proof is higher for claims like this because of prior, false stories.
Washington DC delenda est.
(Score: 3, Insightful) by AthanasiusKircher on Wednesday June 07 2017, @04:33PM (1 child)
To be fair, I wasn't just responding to your initial post, but more directly to another parent post below yours that WOULD require some sort of collusion among insurance companies to work. Yes, in the process of replying there, I also made some comments you have related to your post, but I agree that your particular theory doesn't necessarily require that scale of collusion.
On the other hand, it DOES still require more than a NY Times reporter making a few circles in a car during a sort of "product review." Here, you have the AAA chief actuary going on the record saying effectively, "I've crunched the numbers, and these are costing us more to insure." Actuaries are a heavy regulated profession with professional organizations that regulate qualifications and professional behavior. A reporter who skips out on some details in a review might have his reporting labeled as unfair; an actuary who knowingly disseminates a false actuarial opinion could face sanctions that end his career.
Finally, even your claims about the NY Times seem a bit exaggerated, based on your OWN link from Forbes. The Forbes story actually notes at its end that the review was primarily targeted at the Supercharger network, not the Tesla Model S. And the supposed "telemetry" issues that you claim to be "lies" apparently had to do with (1) a 2-mile detour, and (2) circling a bit to find an unlighted charging station at night. The reporter in question responded to Musk's criticism and admits that if he did such a test again, he likely would have plugged in the car for an overnight charge, but he didn't think it was necessary given the car's reputation AND was assured by Tesla that he should be fine even after the charge dropped overnight. Moreover, again as your Forbes link notes, the reporter was trying to evaluate the PRACTICALITY and ease of use for the Supercharger network.
If you have something more than your Forbes account to confirm your "lies," by all means offer it. But from a neutral perspective (I don't care much about Tesla one way or the other), it looks like a reporter who perhaps was slightly less careful in some of decisions than Tesla owners might be, but your assertions for deliberate sabotage aren't supported even in your own link.
(Score: 4, Insightful) by AthanasiusKircher on Wednesday June 07 2017, @05:20PM
I've done some of your work for you, since I'm legitimately curious about this story (which I guess I missed when it happened years ago).
Here's Musk's account [tesla.com] and criticisms, including lots of graphs.
Here's a point-by-point rebuttal [nytimes.com] by the reporter, including explanations that he was advised by Tesla personnel to do certain things that Musk then criticized him for.
And here's a Times editor [nytimes.com] commenting on what happened, along with an extended quote from a reader's reaction.
And the tow truck driver [jalopnik.com], who didn't seem to think the Times reporter was "faking" an incident.
And yes, other Tesla owners could make the trip [greencarreports.com], though they didn't recreate the cold night, and it wasn't without incident. (One car wouldn't accept a full charge at a Delaware station, which then caused other cars to be unable to charge properly there, which required calls to Tesla support and pushing new software to fix it.)
Sounds like a bad story, a reporter that was perhaps careless, and a bunch of nonsense dithering with Musk over driving stats. Imprecision in reporting, coupled with an overreaction by Musk that apparently fails to acknowledge most of the reporter's behavior was sanctioned by Tesla. Unless you want to claim that the calls made to Tesla about his drive, during his tow, etc. never happened either.
(Score: 2) by krishnoid on Wednesday June 07 2017, @07:18PM
*My* conspiracy theory goes like this:
[some other conspiracy theory] their owners have deeper pockets. So they can make much more money [remainder of other conspiracy theory]