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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: 3, Insightful) by Phoenix666 on Wednesday June 07 2017, @12:51PM (19 children)
This smacks a lot of other attempts to smear Tesla and break their momentum as a company. The New York Times, the bastion of American journalism, deliberately tried to get the Model S they test drove on the East Coast to fail, ignoring every warning and then claiming the car broke down on the side of the highway [forbes.com].
Then there was the "fiery crash [cleantechnica.com]" in which a large piece of metal punctured the battery pack. The media ran those breathless headlines everywhere. Turned out the car told the driver to pull over. He did. Some 15 minutes later the battery pack started to burn and the firewalls in the car contained it to the "frunk" (front trunk). That episode wound up driving home to auto buyers how much safer the Teslas are than gas-powered cars.
Then there's the meme [wired.com] where, 'Teslas aren't that green because they're just shifting fossil fuel burning from gasoline to the coal-fired power plants, herpa derp.' And when Tesla builds an extensive network of superchargers all over the country, powered by solar, they say nothing.
This article makes it sound like Teslas crash more. I don't believe it without a lot more evidence, gathered by disinterested 3rd parties, whose research methods are 100% open, transparent, and subject to verification.
Until then, the real story I suspect is that Teslas have been far out-selling their competitors Mercedes, BMW, and Lexus in the luxury category, and they're desperate to throw as many obstacles in their way as they can to buy time to catch up with their own EVs.
Washington DC delenda est.
(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?
Would a Dyson sphere [soylentnews.org] actually work?
(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]
(Score: 5, Insightful) by AthanasiusKircher on Wednesday June 07 2017, @02:31PM (6 children)
The way you say is makes it sound like TFA is saying Teslas themselves are less "safe" (however "safety" is defined). But it doesn't necessarily mean that. It could mean that Tesla drivers are less safe as a demographic. It could mean that Teslas -- as a somewhat rare car -- just cost significantly more to repair, for average claims. It could mean that Tesla drivers for some reason just file more claims (perhaps other car owners are more likely to pay for less major repairs out of pocket or something).
Also, Tesla and AAA may be looking at different aspects of claim costs. From this analysis [cleantechnica.com]:
I don't know enough about the situation to know whether this is all accurate, but it's more nuanced than just saying, "Teslas crash more."
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @02:53PM (4 children)
Understanding anything P666 posts is pretty simple:
P666 is obsessed with established (and thus evil) "elites" and wants them overthrown by new elites.
So the insurance companies are evil elites, while billionaire musk is a 'good' elite.
Anything an established elite does that doesn't help a new elite is visible proof of conspiracy.
Its the tip of the elite deep state iceberg.
For some reason he thinks elites trading places will help the plebs. Because the new boss isn't the same as the old boss.
(Score: 2) by Phoenix666 on Wednesday June 07 2017, @03:08PM (3 children)
Understanding anything is simple when you reduce it to a caricature. That's OK. It's hard to think. Processing complexity takes effort. Nuance and critical thinking are for oldsters who believe not everything can be reduced to a one-click smartphone app, which every right-thinking AC knows absolutely is the case.
Yeah, sure, in this case I supplied substantiation that the New York Times did do a hatchet job on Tesla, and got caught; that the media seized on one of the first Tesla car fires and blew it out of proportion, and got caught; and that others push a meme about carbon-shifting that has been disproved. I could also have cited the case where Top Gear staged the failure of the Tesla Roadster in their review of the car, and only escaped liability because they called their show 'entertainment,' not 'factual.'
But you're right, citing several cases in a row of "reputable" sources doing hatchet jobs on the company is purely my personal invention and no proof at all. You win, AC.
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @03:20PM (1 child)
> ...I supplied substantiation that the New York Times...
But none of your examples have anything to do with the cold facts that actuaries work with when setting insurance rates. Things like: the types of drivers attracted to certain models of car, cost to repair, where the car is garaged, etc. As someone else noted earlier, there is plenty of competition in the car insurance business, no insurance company will survive for long if they set rates based on popular press reports.
(Score: 2) by Phoenix666 on Wednesday June 07 2017, @03:46PM
Yes, because my examples were about other parties gaming data to smear Tesla and its cars before. The NYT reporter was gaming the review, unaware that Tesla had put a black box in the car after they got burned by Top Gear doing the same thing. And PR companies specialize in hits like this. I don't know that one was behind this AAA story, but it feels suspect to me.
So bring you the cold facts the actuaries were working with to justify this rate increase and let us judge. Athanasius did, and that's good because it's adding perspective to the discussion of the topic. I don't know that it's what was happening here, but it's at least something to chew on.
Your "contribution" to the discussion, though, was to belittle me categorically. It adds nothing and makes none of us any wiser.
Do like Athanasius, not as you have done.
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @07:08PM
You voted for trump because (you say) you didn't know the TPP was already dead on arrival.
You constantly tell everyone how you got fired by the Clintons after partying it up in arkansas.
You claim that the existence of one conspiracy proves any other conspiracy theory is true.
Face it, you are a caricature.
(Score: 0) by Anonymous Coward on Wednesday June 07 2017, @03:15PM
See my earlier post --
by Anonymous Coward on Wednesday June 07, @10:06AM (#521902)
It may have the side effect of a tax on hipsters, but I strongly suspect the real reason is that Model S and X are aluminum intensive. Aluminum bodied cars are *much* more expensive to repair than the steel equivalent. Ask any premium car owner -- Jag, Audi have been early with aluminum, but it's everywhere now.
Possible reasons that AAA is seeing extra repair costs in their data could be:
+ Expensive replacement body panels (probably only sourced from Tesla, no aftermarket).
+ Can't get the Tesla parts at regional or local parts warehouses, requiring extra delays in shipping out the parts.
+ Very few Tesla approved repair shops, so longer flat-bed runs if you aren't near the right shop.
+ After a distant repair, the car may have to be flat-bedded back to the owner, because lack of range.
Some of these will go away if Tesla continues to grow and invests in their complete "ecosystem" beyond just Superchargers. Cars get bent and it costs to fix them.
(Score: 3, Interesting) by Whoever on Wednesday June 07 2017, @03:21PM (2 children)
Indeed. Even if your electricity is 100% generated by coal, an electric vehicle is likely to result in less CO2 emissions than any car that does (in real life, not the EPA tests) less than about 40mpg overall.
(Score: 2) by Phoenix666 on Wednesday June 07 2017, @03:52PM (1 child)
Exactly, and when you follow their logic and say that a person driving a Tesla in the Pacific Northwest where hydroelectric is a much bigger share of the total is shifting less carbon accordingly, or in Iowa where wind is a bigger share of the total and shifting less carbon accordingly, isn't their counter inevitably, "But, but, but, dams harm spawning salmon and wind turbines kill thousands upon thousands upon thousands of migratory birds so SEE electric cars are sooo much more horrible for the environment that gas-burning cars..."
That's a bit hyperbolic, but the talking points in the fossil fuel playbook are quite limited and repetitive.
Washington DC delenda est.
(Score: 2) by maxwell demon on Wednesday June 07 2017, @08:02PM
Drive it in France. Then you've got a nuclear-powered car. :-)
The Tao of math: The numbers you can count are not the real numbers.
(Score: 2) by urza9814 on Wednesday June 07 2017, @04:13PM
As far as the insurance company is concerned, if it gives you fifteen minutes warning then bursts into flames or if you just barely escape before the whole thing explodes, the end result is the same -- your car is totaled and they have to pay for it. Failing *safe* doesn't necessarily make it cheaper to insure, *not failing at all* does. Teslas use a lot of new technology, and they've clearly added a lot of sensing to detect and compensate for any failures of that technology...but it still fails and insurance still pays for it.
I'm not saying that Teslas *are* more expensive to insure, just that I don't think it's unreasonable that they could be. They're very expensive cars, using a lot of new tech, that probably get driven kinda rough by some drivers (if they've got that much power, they're gonna use it), and there aren't many on the road yet so the few incidents we've heard of represent a larger share of the total than they would if it was any other car.