AAA Raises Premiums for Tesla Vehicles Amid High Cost of Claims

AAA says it could raise rates on Tesla vehicles as much as 30 percent due to findings from recent insurance data, reports Automotive News.

The agency first noticed something amiss when examining its own insurance statistics. Then it examined data from the Highway Loss Data Institute and confirmed that the amount and cost of claims for the Model S and Model X are much higher than average, both in their respective categories and the overall population of vehicles.

“Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates,” AAA chief actuary Anthony Ptasznik revealed to AN.

The Highway Loss Data Institute studied 2014–2016 model year vehicles and divided them into classes based on size, weight, and rival models. The Institute considers the Model S to be a large luxury vehicle because its footprint measures between 90 and 110 square feet and it weighs between 3,500 and 4,500 pounds. Typically, owners of vehicles in this category report collision damage claims 13 percent more frequently than the average of all vehicles, and the claims are 50 percent more expensive than average. For the rear-wheel-drive Model S, however, claims are reported 46 percent more frequently than average and are more than twice as expensive as average.

Large luxury SUVs show about the same claim frequency as the average of all vehicles, and the costs of the claims are 43 percent above average. But the Model X is involved in 41 percent more claims than average, and the costs are 89 percent higher than average.

It’s important to note that Tesla disagrees with the analysis.

“This analysis is severely flawed and is not reflective of reality,” the automaker said in a statement to AN. “Among other things, it compares Model S and X to cars that are not remotely peers, including even a Volvo station wagon.”

Indeed, the Highway Loss Data Institute puts the Model S in the same category as the Volvo XC70 station wagon, as well as more conventional competitors such as the BMW 5 Series, Audi A6, and Mercedes-Benz E-Class. Tesla says that considering the quick acceleration of the Model S and Model X, it’s “false and misleading” to compare against vehicles such as the XC70.

Tesla also points out that the Model S holds the lowest likelihood of injury, according to the National Highway Traffic Safety Administration. The Model S has earned five stars in each category and overall in NHTSA tests. And although the Model X hasn’t undergone crash testing from NHTSA yet, Tesla says it expects the model will achieve “the best score for any SUV ever tested.”

Other big insurance companies have yet to reveal whether they will raise rates on Tesla vehicles. Meanwhile, Tesla says it is working with insurance providers to help them evaluate the benefits of its semi-autonomous technology. NHTSA found that Autosteer decreased crash rates by 40 percent, which could help keep rates down.

Source: Automotive News (Subscription required)

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