After launching its original insurance offering in California in 2019
Tesla is now selling insurance to customers in Texas, two years after first launching the offering in its now-former home state of California. But the version in Texas is different. The company says it will evaluate driving behavior in real-time using the “Safety Score” feature that it recently launched to screen drivers who want to join the beta test of the company’s “Full Self-Driving” beta software.
That means drivers might wind up paying less or more per month based on how many forward collision warnings they rack up, how hard they brake, how “aggressively” they turn, how much distance they leave to the car in front, and whether they keep their hands on the wheel when using Autopilot. Tesla used some driving behavior metrics to develop premiums in California, but they were not real-time and relied more on statistical evaluations.
The offering in Texas represents a big break from how other insurance companies arrive at their quoted premiums. Even ones that rely on data from telematics dongles plugged into a car still consider other factors like age. Tesla is, unsurprisingly, promoting those differences.
Unlike other telematics or usage-based insurance products, Tesla does not require an additional device to be installed in your vehicle. Tesla uses specific features within the vehicle to evaluate your premium based on your actual driving. You will make monthly payments based on your driving behavior instead of traditional factors like credit, age, gender, claim history and driving records used by other insurance providers.
The company claims owners could pay premiums that are anywhere between 20 percent and 60 percent cheaper than the competition if they opt to use Tesla’s insurance. While other insurance providers relentlessly promote that they offer lower rates to safer drivers, the new version of Tesla’s insurance product could offer the most tangible version of that promise, as long as it works as advertised.
Tesla has been working to expand its insurance offering to other states, but CEO Elon Musk announced at the company’s recent shareholder meeting that Texas would be the first to follow California. Musk also announced at that meeting that he was relocating Tesla’s headquarters to Austin, Texas, where the company has spent the last year building its next US automotive factory.