Did you know that Tesla has its own car insurance company? Unfortunately, it’s been slammed for being unprofessional, ridiculous, and lacking in customer service.
A report from Reuters detailed multiple customer allegations against the carmaker’s insurance division regarding poor communication, an apparent lack of processes, and increasing premiums based on a “safety score”.
Tesla first began selling car insurance in 2017 under the name InsureMyTesla. CEO Elon Musk said dealing with traditional insurance companies was a “nightmare” and created his own insurance company to create a better user experience. This has turned out not to be the case.
The news outlet interviewed policyholders and sourced complaints from social media and online posts included on the Better Business Bureau website.
Some customers claim Tesla took months to release payouts for totaled vehicles, and one customer claimed it took more than 15 calls to get a hold of someone from the insurance company after a collision, calling the service “totally ridiculous.”
Other customers who managed to get through were told that Tesla would need to call them back–only they never received those promised callbacks.
Sources told Reuters that Tesla insurance employees were sometimes answering phones and handling hundreds of claims at the same time–a far heavier workload than at other standard insurance companies.
Tesla reportedly will vary its customer’s premiums based on a daily “safety score” which is based on their customers’ driving habits. However, this is standard for many insurance companies if you opt in to the program. With Tesla, it’s automatic.
Reuters reports that Tesla is facing two lawsuits over claims that its vehicles are prone to producing false collision warnings, which can reduce a driver’s safety score.
One customer told Reuters her insurance premium jumped up nearly 50% as a result of the Safety Score system. Another customer struggled to obtain a proof of insurance and claims the policy had to be reissued for it to effectively appear in his Tesla App.
“The problem is there is no customer service. At all,” he posted on Facebook.
Tesla closed operations of InsureMyTesla, before bringing an insurance product back in 2019 under a different underwriter.
According to the California Department of Insurance, Markel Group State National Insurance–Tesla’s underwriter–had the worst consumer complaint recording amongst the top 50 California car insurers.
In July 2020, CEO Elon Musk, in an earnings call, said Tesla Insurance was “revolutionary” and predicted within three months it could account for 30 to 40 per cent of the value of the Tesla brand.
In 2021, according to Californian insurance records, Tesla insured more than 50,000 vehicles within the state.
Currently, Tesla offers insurance in Arizona, California, Illinois, Colorado, Ohio, Maryland, Minnesota, Nevada, Oregon, Texas, Utah and Virginia.
Reuters reports Tesla has applied to expand its insurance into Florida, Georgia, and Washington.