US Insurer Hikes Tesla Premiums Due To 'Higher-Than-Average' Claim Rates (theverge.com)

An anonymous reader writes: "National insurer AAA is raising its prices for Tesla's Model S and Model X, citing higher-than-average claim rates and repair costs for the two cars," reports The Verge. "According to a report from Automotive News, AAA said it could raise its premiums by as much as 30 percent for the vehicles. Other large insurers including State Farm and Geico told the publication they couldn't say whether or not they would also increase prices, but noted that data about claim frequency is always used to calculate insurance premiums." Musk claims that AAA doesn't know what they are doing, but fails to be specific as to what is incorrect about their data or its usage. [The company says the AAA has made its decision based on faulty information from the Highway Loss Data Institute.]

Comments

Innuendo

[Okian Warrior]

I've been following Tesla's stock price of late.

It's at an all-time high ($347) going into the shareholders meeting, and most of the news is filled with innuendo intended to cause panic selling.

Examples: "Tesla: Could confusion kill model 3?", "Is Tesla Inc Stock Worth All the Controversy?", "Tesla Cars: Easy To Total, Expensive To Repair", and so on.

It's impossible to research stocks by reading the financial news nowadays. Lots of manipulation-driven reporting.

Re:Innuendo

[Gavagai80]

Musk said Tesla's stock price is "higher than we have any right to deserve", yet people ignore him and keep driving it up. Apparently they don't trust him when it comes to his evaluation of his company.

Re:Innuendo

[gweilo8888]

Or maybe, Tesla actually has real problems it needs to resolve, but you're dismissing those concerns because standard Slashdot practice is to fellate Mr. Musk at all times, no matter how utterly absurd the idea. (See: Hyperloop.)

Re:Innuendo

[squiggleslash]

Just to be clear, is it your position that AAA, an insurance company off-shoot of a respected automotive owners organization, has not actually made any announcement that it intends to hike premiums for Tesla owners and/or has made no comments about Tesla claims being more frequent and more expensive?

Or is it your position that this has happened, but actually a major insurance company is making this decision not for the benefit of its shareholders, but in order to manipulate Tesla's stock price?

(Just so you're aware, Google is reporting the same story from numerous respected publications so the first option is highly unlikely; the second allegation is extremely serious, and could constitute libel if false, so be careful if you decide to assert it.)

This is entirely expected

[HBI]

Create a high priced performance car and duh, people drive fast with it.

Have short production runs and, post-collision:

1) No used parts to pick, no clips to cut off of prior wrecks, etc
2) OEM parts are expensive!
3) Batteries aren't going to hold up well in a crash, not as well as an engine block at least.

So yeah, of course they cost a lot to repair. I expect that the crash guides for a Tesla aren't as complete as the ones for major automakers, either, so there probably is a lot of time spent on the phone calling Tesla to find the whatzit that connects part B35 with B37. This kind of thing is very common with truck body repairs, but not so common with cars nowadays. It definitely makes estimating and repairing harder. As with trucks, some custom fabrication may be required (?) just a guess. I question whether they have a SKU for every single part in their car.

Then again, I expect a lot of people buying a Tesla probably don't anticipate all of this because they don't know the business.

Re:This is entirely expected

[EETech1]

I wonder if the autopilot requires any calibration to align all of the various sensors?

If I owned a body shop, I would not feel comfortable repairing, and putting my a$$ on the line saying that all the complicated systems on that car were properly repaired without specialized training, equipment, and certification, and I highly doubt there's enough of them around to make it worth the investment.

Let the Tesla service center deal with it!

Re:This is entirely expected

[HBI]

It would probably work like this:

The body shop would pull the Tesla back into alignment itself. It's unibody construction so this can be done. However, pulling aluminum parts runs a big risk of cracking them, so you'd have to be very careful while doing it and do dye tests and crap like that. Otherwise, you have to just entirely replace parts (another reason fixing a Model S, for instance, would be very expensive).

The shop would measure it out and make sure it met original specs, replace suspension parts and other mechanical stuff, and reconstitute the electric drive train (if necessary). They'd also replace wiring harnesses rather than futz with it like on another car (a nod to the issues with the computer control). The shop would install sensors, too. They'd feel comfortable with that - it's a wear item.

When it came time to verify the computers, then it would go to the Tesla dealer.

The truth of the matter is that if you had one, and you wanted it repaired, you'd probably deal with a shop that works with the local Tesla dealer and pay the exorbitant labor rate, same as you would with an expensive German car, let's say. Thereby having a chance of having a good working vehicle at the end.

There are probably a _lot_ of "constructive total losses" of Teslas for this reason. It's a nightmare - I just did some reading about it and I wouldn't want to write the ticket on this. I did that job for years and my dad did it his whole life. You'd send the guy who didn't mind writing 5 supplementals and going over the vehicle inch by inch with the shop owner.

Re:This is entirely expected

[HBI]

Blocks can be recovered from some pretty hard hits. Might need to replace the mounts, pulleys and extraneous gear, but the block is rarely damaged. A battery takes any physical damage and it's done. You can play games with the placement all you want. I can still figure out a way to hit it.

Gas tanks being placed (generally) rear between the frame rails do not prevent fires. I don't know why you're so convinced those batteries are immune from harm. That cage is just a name. People get smeared against their steering wheels all the time by a sufficiently hard hit from the rear. Never mind T-bones.

I'm thinking of one Honda CRX from back in the 90s where the person was standing on the brakes at a red light and a tractor-trailer unit with the driver asleep (or on meth or whatever) rear-ends the vehicle at above posted speed. I suppose the nature of the hit militated against her releasing the brake. The cops flatbedded it into their warehouse (this was in Morris County, NJ) for evidence. I got to look at it 3 days after the hit. It was a half car. The front seats were into the firewall and they'd used the jaws to cut the woman out from the driver's seat. for what good it did her. She died at the scene.

That car didn't burn, but I suspect the reason why was that the gas drained out quick due to the gas tank being crushed quickly.

Anyway that was one vivid example I remember. There are thousands of others. I saw so many burn jobs that they all blend together. The crispy flesh on the edges of the charred seat, with a human-shaped unburnt upholstery image. The coppery smell mixed with burned hair...never leaves you. I think my dad used to stick me with those on purpose. Yecch.

Re:This is entirely expected

[AmiMoJo]

The law needs to keep up with tech and make sure that the equipment needed to calibrate the auto-pilot and anything else is available to all garages. Same as the diagnostic codes via OBD-II.

Re:This is entirely expected

[conquistadorst]

If a repair shop doesn't know what liability insurance is, then he probably shouldn't be in the repair business anyway.

Liability claims always arise by accident but the insurer will most certainly nail you if you even make a slight habit of introducing liability claims. We haven't even mentioned yet the moral hazard of ignoring how he'd be sending innocent people off with cars not working properly. I'm sure you didn't mean to condone that but that's certainly what you made it look like. The guy is just trying to make a point that learning how to repair a Tesla vehicle is an investment he's not willing to make at this time. I'm sure he's not the only one. Really can't blame them, there aren't enough of them on the road to warrant it for a proper ROI for his business.

Re:This is entirely expected

[HornWumpus]

Aluminum stretches when it bends. It's almost impossible to straighten a seriously bent aluminum part.

Aluminum also age hardens. 50 year old Al cars are brittle. Their panels crack if a person leans on them too hard. Which matters because 50 year old Al cars are rare and very expensive (e.g. AC Cobras).

Do Americans even understand insurance?

[roman_mir]

Over the last decade I have become convinced that nearly all (a vast majority) of Americans don't understand anything about insurance, don't understand what insurance is and how it works as a business.

Lets say I start an insurance company and attract customers by offering car insurance that would have a high deductible and low monthly payments. Say 15,000USD deductible and maybe 50USD/month premium payments, so it makes no sense to approach me until your loss reaches 15,000USD but if it goes over that limit you would be covered. I am not an actuary but maybe this product would make sense and maybe there would be clients for it. Would anybody expect to be able to use this insurance product to buy gas at the gas station? To get oil chances through insurance? Tire rotation and alignment (and replacement)?

I think people would realize that insurance is not for those purposes, it is for cases where you destroy your car, maybe destroy somebody else's car, maybe you face a legal challenge and hospital bills and such. People would buy this insurance product as a lottery ticket, where winning would mean actually pulling a short straw.

So now try to extend this understanding to health insurance, why is it so difficult for people to take that mental leap?

If an insurance company offers health insurance that basically works the same way, maybe it covers 30-50 specific tough conditions, the premiums are low but the deductible is high, most people wouldn't need the payouts but the money would be there for those who pull that short straw.

Now imagine the government says: your high deductible, low monthly premium insurance is also going to cover something that is used daily by half of the population (say birth control pills that are needed regularly), what you are doing telling half of the insurance clients: this is no longer a lottery that has similar odds for all of the participants, this is a subsidy from one half of the participants to another half. If you are a man you are going to be paying for women's birth control under this plan.

How does this make any sense for the men to buy this product? It doesn't, it's a waste of money, a large portion of the bill for the half of the people in the insurance pool will go towards simply buying monthly birth control for another half of the pool participants.

So instead of maybe a 80USD/month high deductible, low premium plan you are now billed 110USD/month, where 30 bucks is simply a cost and can never be used to increase the pool, it's a stupid cost on you so that some other specific person can get their free birth control.

Yet a huge portion of Americans don't understand that this makes 0 sense not only for the insurance companies but for at least half of the insurance clients, after all it is the insurance clients who pay insurance premiums that are used to make payouts.

Except that now rather than having a payout based on some very low odds of very few people in the pool getting sick you are forced to pay something that is guaranteed to be used by half of the people in the pool (and not by you).

Lets take a look at the concept of 'pre-existing condition' from point of view of car insurance. You wreck your car and then you approach an insurer asking to cover your losses and you are offering a month worth of premium payments.... If the insurer cannot deny your demand then there is 0 reason to be a client of an insurance company until you wreck your car.

So the insurer has to get the money from *somewhere* but not from the actual insurance pool, there is no insurance pool.

Now take a look at what USA government did under Obama: it took an actual insurance industry where people actually got their insurance payments out of the insurance pool based on monthly premiums paid by the willing participants and said that you no longer have to participate in the pool prior to getting sick and prior to needing insurance money...

A vast majority of the Americans are looking at it, straight at it and somehow they be

Some numbers from Geico

[iotaborg]

Just ran a quote for a new Tesla Model S 70 on Geico and it comes out to $270/mo, ouch. My few years old Subaru is only $75/mo with full coverage. Even a new Audi S6 would run me a far more reasonable $130/mo.

Re:Some numbers from Geico

[Dog-Cow]

Insurance rates are based on statistics. If a particular model tends to be involved in expensive accidents, it will have a higher rate, even if the car itself is junk. The statistics don't care why such cars are accident-prone or why they are expensive to repair.