Tesla owners slam company's “totally ridiculous” insurance

Tesla’s car insurance product in the United States has been slammed for being “totally ridiculous” and lacking 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 said “we’re trying to turn a nightmare into a dream with Tesla Insurance”.

Supplied Credit: CarExpert

However, as Reuters reports, Tesla’s insurance company appears to be rife with problems of its own.

The news outlet interviewed half a dozen policyholders, and sourced complaints from social media and online posts including on the Better Business Bureau website.

Some customers claim Tesla took months to release payouts for totalled 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 they needed to be called back, only to never receive a callback from Tesla Insurance.

Sources told Reuters that Tesla insurance employees were sometimes answering phones and handling hundreds of claims at the some time, which is a far heavier workload than at other insurance companies.

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Tesla reportedly will vary its customer’s premiums based on a daily “Safety Score” which it claims is reflective of a customers “real-time driving behaviour”.

Reuters reports Tesla is facing two lawsuits over claims 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 per cent as a result of the Safety Score system.

“I’m not satisfied with how the safety score is calculated… You’re grading me on something that’s not working properly,” she said.

Supplied Credit: CarExpert

According to the news outlet, the customer took her vehicle to be inspected by technicians due to its software malfunctioning. She claims during a vehicle inspection of her car a technician didn’t wear a seatbelt while driving and the Tesla software recognised the unsafe behaviour.

That day the customer claims she “got dinged” on her safety score.

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 reportedly posted on Facebook.

Tesla closed operations of InsureMyTesla, before bringing an insurance product back in 2019 under a different underwriter.

Supplied Credit: CarExpert

According to the California Department of Insurance, Markel Group State National Insurance – Tesla’s underwriter – had the worst consumer complaint recording among the top 50 Californian car insurers.

In July 2020, CEO Elon Musk in an earnings call said its Tesla Insurance was “revolutionary” and predicted within three months it could account for 30 to 40 per cent of the value for 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.