Upgrading the global electrical grid…
Heavy rainfall has helped to…
AAA is raising premiums on Tesla vehicles by 30% after data showed that owners of Model S and Model X cars filed claims at abnormally high rates, and that those claims cost more compared with other cars in the same class, Automotive News reported.
Tesla, of course, is disputing the insurer's 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."
AAA’ chief actuary said the insurer noticed the anomaly in its own data before confirming it with data provided by a second source, 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," he said.
Other large insurance companies, including State Farm and Geico, said that claims data is a major factor in calculating premiums. But they would not disclose if their Tesla-owning customers would also see rates rise.
The Highway Loss Data Institute report covered the 2014-2016 model years. Vehicles are divided into classes based on size, weight and competing models. The frequency and severity of claims are compared with overall average claims. The report found that the frequency, and cost, of claims related to Tesla vehicles was much higher.
Related: Canada Pushes For Zero Emission Vehicle Strategy
"Teslas get into a lot of crashes and are costly to repair afterward," said Russ Rader, spokesman for the Insurance Institute for Highway Safety, which is the Highway Loss Data Institute's parent organization. "Consumers will pay for that when they go to insure one."
Tesla said the Highway Loss Data Institute's system placed it with the wrong competitors. If it were compared with similar rivals, the company argued, its crash data would not stand out negatively.
Tesla said the high rate of acceleration in both the Model S and Model X make it "false and misleading" to compare against vehicles such as the XC70, adding that the Model S also holds the lowest likelihood of injury, according to an evaluation by the National Highway Traffic Safety Administration.
"We expect Model X to receive the best score for any SUV ever tested," a Tesla spokesperson said.
Collision damage claims for large luxury vehicles are reported 13 percent more frequently than average, and those claims cost about 50 percent higher than average, the Highway Loss Data Institute said. The rear-wheel-drive Tesla Model S is involved in 46 percent more claims than average, and those claims cost more than twice the average, it said.
In the large luxury SUV class, where collision coverage claim frequency is the same as the average for all vehicles and the cost of claims is 43 percent above average, the owners of the Model X file for claims 41 percent more often than average, and those claims cost 89 percent more than average, according to the institute.
Related: Why Is The U.S. So Far Behind In The Renewable Revolution?
New approaches to calculating premiums may eventually benefit Tesla owners, Automotive News reported. Root is an insurance startup that sets premiums based on individual driving behavior. Customers download the Root app and drive with their smartphone in the car for two weeks. Rates are determined from the habits observed over that period.
Semi-autonomous driving features help bring rates down, said Root CEO Alex Timm. The company gives a special discount for Tesla vehicles equipped with Autosteer — part of Tesla's suite of Autopilot semi-autonomous tech — which NHTSA found reduced crash rates by 40 percent.
"Insurance premiums should reflect risk," Timm said. "Autonomous vehicles are safer and will continue to get safer. It's proven in the data."
Tesla said that it is working with insurance companies to properly evaluate the benefits of Autopilot.
"As part of the Insure My Tesla program, Tesla is working with leading insurers resulting in lower prices for Tesla insurance, not higher," Tesla said in its statement. "These leading insurers also appreciate the added safety benefit of Autopilot."
The big question, of course, is that if Tesla owners have to pay considerably higher insurance premiums, what happens to the marginal new Tesla car sale?
More Top Reads From Oilprice.com:
The leading economics blog online covering financial issues, geopolitics and trading.