Tesla Insurance set to disrupt the market
Source: https://www.tesla.com/insurance
Safety Score was introduced in September 2021 to rate drivers' performance prior to the wide release of the Full Self Driving beta in the US and Canada. Much like a black box which a lot of insurance companies mandate be installed in their customer's vehicles as a condition of cover, Tesla already have access to all of the telemetric data from your journeys if you allow it (otherwise it’s aggregated with all others for anonymity). Grading that against a particular set of measures like sharp braking/turning, follow distance or time of day returns an overall score out of 100.
Initially it was extremely difficult to achieve anything past 98 or 99% simply due to unavoidable situations where firm braking might be the best course of action, like being cut-off or having something jump into the road, and it still needs some refinement to be able to identify and accommodate those situations. In general the system worked well to determine the group of users they deem most fit to trial the software, however, they've abandoned that requirement since 23rd Nov 2022 and anyone in the US or Canada who's purchased the FSD package may now opt-in from within their vehicle.
The score though lives on and lays the foundation for yet another market disruption - Tesla Insurance. With the ability to accurately track an individual's performance it's much easier to give fair ratings to everyone and not rely on average statistical data as most of us have to deal with - are you a male, under 25, first time driver? In the UK you'll rarely get an affordable quote on any vehicle, regardless of how safe you may be or how often you drive. I was practically forced to have a black box in my first car despite being 29 and having ridden a motorcycle for 12 years, one size fits all is the answer in that game and I relented to save paying double, but almost immediately regretted that decision. Tesla at least guarantee that your data is safe and secure with them and will never be sold to any third-parties, they actually released an informative clip to spread this information:
Tesla are able to offer a very competitive monthly premium based primarily on your last month of driving and offer tips to save money next month. Reduce aggressive turning or increase your follow-distance and you can very easily reduce the cost by a fair amount, your wallet will very quickly feel the benefit. It seems likely to train better habits too as there'll be motivation to keep the price low, knowing you actually have some control over the situation!
Obviously there are some factors that must still be based on unchangeable circumstances, location for example and the rate of crime in it still play a part in the calculation, but no more than before. It's highly probable most owners will forego their previous provider and choose this option once available, since they're the best selling cars in so many international markets a higher and higher percentage of road users will be safer and the traditional providers will begin to miss revenue. The key end result is most Tesla drivers, thus a larger and larger portion of people on the road, will be training their skills, becoming safer and more responsible whilst saving money. Yet another upcoming disruption to the status quo from the mind of Mr. Musk.
It makes so much sense for them to be an insurance underwriter to save their customers even more time, money and convenience, but also in terms of FSD. A big, unanswered question remains regarding the liability of self-driving cars, let alone Robotaxis. It's likely this will not be resolved before the software is actually ready and deployed globally, it also makes sense that traditional brokers will not know how to handle it and massively miss-sell it or be unwilling to even offer a policy, at least until some baseline data is available to understand their real ability and liability. Currently there's no way to legally send your Tesla on the road as a Robotaxi and of course it's not possible just yet, but we're certainly edging closer each day.
It's adopted spookily human-like behaviour in most situations and once it can comfortably navigate the US, adapting to other country's rules and infrastructure will be a trivial challenge compared with creating the neural networks that actually process the car's vision. It could appear much more suddenly than we anticipate as we teeter on the initial incline in the S-curve of progress. To get an idea of just how far it’s come take a look at the difference from two years ago compared with today:
Tesla Insurance is only available in the following 11 US states currently:
Arizona
Colorado
Illinois
Maryland
Minnesota
Nevada
Ohio
Oregon
Texas
Utah
Virginia
Plans to roll out in Europe are underway, since March of 2022 there's been a European operations office registered at their London HQ - 109 Devonshire Road. Just recently a job posting was spotted for legal counsel to lead the team, within it Tesla Insurance Ltd describe themselves as a "full-stack in-house insurer...rethinking the way our customers experience insurance and protect their Tesla products." The business is continually expanding as legislation is filed and approved, it's a long and tedious process to enter into this market and it's only delayed by the predictably slow bureaucracy.
As I've mentioned previously I use Direct Line as they're the official partner for the UK and they do offer great service and a better price than most places I checked. Still I can't wait to be able to buy cover from Tesla directly, manage it in the app alongside the car finance, never have to worry about renewal or searching for better deals, all the while saving money and becoming a better driver - how could it be sweeter?!