Tesla has created a customized insurance package

http://www.businessinsider.com/tesla-liberty-mutual-create-customize-insurance-package-2017-10?r=US&IR=T

by IgorPartola • 9 years ago

84 57 9 years ago

businessinsider.com

sschueller• 9 years ago

"which lowers overall insurance costs by factoring in the vehicles' Autopilot safety features"

Are they saying the autopilot makes the care safer? Hasn't the opposite occurred? [1]

[1] https://www.ntsb.gov/news/events/Documents/2017-HWY16FH018-B...

znebby• 9 years ago

No. Perhaps in a couple of cases, but on average, I believe it has shown to be safer.

lisper• 9 years ago

From the original article:

"The National Highway Traffic Safety Administration found that crash rates for Tesla vehicles have plummeted 40% since Autopilot was first installed."

chc• 9 years ago

No, the organization that put that slideshow together concluded at the end of its investigation that the primary causes of the crash were the truck failing to yield properly and the Tesla driver not paying attention for a long time. Their only recommendation to Tesla was to make Autopilot nag drivers more strictly if it doesn't detect that they're paying attention, which Tesla followed. Another agency investigating the crash, the NHTSA, concluded that they could not find a safety risk with Autopilot, they could not find any defects warranting a recall, and they noted that in broad terms Autopilot appears to have increased driver safety.

https://www.ntsb.gov/news/events/Documents/2017-HWY16FH018-B...

https://static.nhtsa.gov/odi/inv/2016/INCLA-PE16007-7876.PDF

dripton• 9 years ago

The safety benefit is from the automated emergency braking system, which Tesla has coupled with the Autopilot package. It's not from Autopilot itself.

whamlastxmas• 9 years ago

I think the more likely reason rates are lower for Teslas is that they log everything happening and send it remotely to Tesla. If someone gets in a wreck and is at fault it's going to be a lot easier for the insurance to see this and deny non-comprehensive coverage.

username223• 9 years ago

Interesting question: can Tesla do this because their cars are safer, or because they already include the surveillance tech for which insurers offer discounts?

https://www.nytimes.com/2014/08/16/your-money/auto-insurance...

matt_wulfeck• 9 years ago

I don’t think that what you’re describing is a significant cost to insurers. Many (most) accidents are shared responsibility. And if you get full coverage (assuming people with Tesla’s generally get full coverage) insurance covers it regardless of whether or not it’s your fault.

The article says that autopilot reduced accidents by 40%, and Elon Musk seems to be frustrated that they’re not taking this into account when determining risk.

agumonkey• 9 years ago

I'm really curious about this, I'm sure the expert review process is extremely inefficient. People will lie and make everything slow. Having loads of data right away is godsend. Also having alert faster may also help (say fire).

djrogers• 9 years ago

Perhaps this varies by country, but in the US I’ve never been involved in an accident where either insurance company looked at it as a ‘shared responsibility’. In fact, in each case a significant amount of effort was expended to prove fault and determine which insurance company was going to pay.

thisisit2• 9 years ago

Insurance as a business relies a lot on past actuarial table data to draw up algorithms to price the premiums. It contains factors like gender, age, occupation etc and the car, which is the highlight here.

If insurance companies do find data supporting the fact that these cars are less prone to payouts, due to Autopilot, they will decrease the premiums. So I am confused what is this whole "car insurance world upside down" all about?

The interesting is this:

"If we find that the insurance providers are not matching the insurance proportionate to the risk of the car then if we need to we will in-source it," Tesla CEO Elon Musk said in February.

So Tesla as a business recognizes the cost of car has gone up due to insurance and might be actively working on subsidizing the costs.

It can either by paying some part of insurance or providing data on crashes. If it is latter, you have to wonder what kind of business Liberty Mutual is running. Any company will always say their wares are safer but it's up to the insurance companies to collect data and verify.

dbrian• 9 years ago

He is implying that the algorithms used by insurance companies are optimizing for profit instead of solely accessing the risk of payout. In other words, Tesla drivers are willing to pay a higher premium to mitigate the same risk.

dogruck5• 9 years ago

In the competitive car insurance market, how can you optimize for profit without incorporating the risk of payout?

Spooky234• 9 years ago

Tesla is a super risky piece of kit for an insurer.

They are a sole source provider of sorts and maintain a tight lock on authorized body shops. Even a car with lots of low volume high cost parts like a Benz has a competitive market of resellers, dealers and service providers.

Tesla is the problem here. Having them be an insurance provider just makes them a bigger problem.

thisisit2• 9 years ago

I might have missed it. Which line implies that?

Additionally how does that turn the car insurance world upside down?

pbz• 9 years ago

"It contains factors like gender, age, occupation etc and the car, which is the highlight here." -- also a big portion of it is your credit score, which, in my opionion, should not be a factor, but it is...

dogruck5• 9 years ago

There are a number of data provider startups with the business model of providing insurance companies with innovative data sets that are proven to be predictive of payout rates. In time, I suspect the coarse proxy of credit score will be supplanted by new data.

FLUX-YOU• 9 years ago

they will decrease the premiums

Idk, I was told point blank that my premiums went up because the company/local insurance agent was struggling. Had nothing to do with my driving.

I might get some sticker price reduction, but I'll end up paying for it down the line somewhere. Insurance isn't primarily about the collective good, so despite technology making us safer, they still have to make profits.

perl4ever• 9 years ago

I don't understand what the maintenance costs have to do with the price of insurance.

emondi• 9 years ago

Maybe an incorrectly maintained car is less safe.

lttlrck• 9 years ago

And why cost of repair isn’t mentioned.

bagels• 9 years ago

Perhaps due to lower fraud rates involving cars that have failed.

jaclaz• 9 years ago

Dupe, previous:

https://news.ycombinator.com/item?id=15524800

sctb• 9 years ago

The previous story probably didn't get enough attention to qualify this one as a duplicate, so we've left it. (See https://news.ycombinator.com/newsfaq.html)

jostmey• 9 years ago

Quote: "The National Highway Traffic Safety Administration found that crash rates for Tesla vehicles have plummeted 40% since Autopilot was first installed."

ucaetano• 9 years ago

"that crash rates for Tesla vehicles"

"for Tesla vehicles"

You'd need to compare this to vehicles from other brands that have had Autopilot-like features for over a decade to actually get a sense of the number, otherwise, it is meaningless. That's like saying:

"Cars with ABS have lower crash rates than same cars without"

sdenton4• 9 years ago

Why is the comparison necessary? My understanding is that insurance should be factoring in the expected value of accidents, which is an absolute measurement, not a relative one.

kodis• 9 years ago

I don't think so. In fact, since they're comparing very similar pools of cars and drivers with the introduction of Autopilot being the major difference, I'd think that this is a more valid comparison than one which compares vastly different pools of cars and drivers.

g00gler• 9 years ago

Isn't that still an indicator, albeit not a strong one, that Tesla-like autopilot features are safer?

Saying "Cars with ABS have lower crash rates than the same cars without" means that I'd prefer a car with ABS... I don't wanna spin out in the snow. I'd also enjoy and feel somewhat entitled to a lower insurance rate than a non-ABS car.

danmaz74• 9 years ago

When they talk about Autopilot, are they also including assisting technologies that help you avert accidents even when you're driving yourself (technologies that other car manufacturers have too)? I'm asking because AFAIK you can't use the Autopilot in urban driving, and I would expect most accidents involving insurance (including non-fatal ones) to occur in urban driving...

jpalomaki• 9 years ago

Another thing is insurance which takes into account how much, where and how you drive. Smart car companies like Tesla are in good position to start offering these as well.

thomas_howland• 9 years ago

There is also the fact that Tesla purchasers tend to be from high socioeconomic classes, even more so than the baseline (extremely predictive) education / occupational category / credit score triptych would indicate. Most insurance risk predictors map directly to SES.

moonka• 9 years ago

Its benefits include replacing Teslas damaged beyond repair within one year.

I don't understand. Most people's insurance will cover the replacement value of your car if it is in an accident. Is this referring to something else?

mhandley• 9 years ago

If you wreck your brand new Model 3 next week, how long to get a replacement? The waiting list is quite long.

greglindahl3• 9 years ago

I've never had a car policy that covers the replacement value of the car. Instead, it covers the value of the car. Big difference.

neurotech1• 9 years ago

The high cost of insurance is partially due to high repair cost. Repairing aluminum car panels is expensive relative to standard steel panels.

Autopilot significantly reduce the crash rate, and Tesla feels other insurance companies don't sufficiently factor this when setting rates.

justinph• 9 years ago

This doesn't seem very innovative to me. Insurance companies are already taking this into account. I recently purchased a new vehicle (Subaru) with active safety features (EyeSight). The insurance is the least I've ever paid, by a pretty decent amount. The insurance company (Geico) specifically asked if I had the EyeSight package when I signed up.

uptownfunk• 9 years ago

Insurance companies are actually undergoing something of a silent revolution in terms of underwriting policies. Many of them are upgrading to some sophisticated machine learning algorithms instead of the traditional actuarial tables. Assuming tesla cars are really safer you would see the algorithms pick up on that (there may be some lag until they catch on) and then price the policies appropriately, assuming that the insurance company is willing to pass that value to the customer.

Animats• 9 years ago

"Its benefits include replacing Teslas damaged beyond repair within one year."

They make you wait for a year to get a replacement car?

jhurliman• 9 years ago

I just got a quote (Model X, California) that is 42% higher than my current monthly premium through USAA :-/.

Tesla has created a customized insurance package

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