If Teslas Are the Future, Why Are They So Expensive to Insure?

Easy to love, hard to repair

By Evan Bleier

 
If Teslas Are the Future, Why Are They So Expensive to Insure?
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05 June 2017

Elon Musk is not having the best week. 

First, the Tesla CEO quit President Trump's advisory council over the Paris accord fiasco. Then, Toyota cashed out all of its Tesla shares. And things didn’t get any better for the tech billionaire when AAA recently announced it was raising insurance premiums for Tesla Model S and Model X by as much as 30%. 

The announcement came as the national insurer evaluated studies from the Highway Loss Data Institute that showed both vehicles “had abnormally high claim frequencies and high costs of insurance claims compared with other cars in the same classes.”

“Teslas get into a lot of crashes and are costly to repair,” Russ Rader of the Insurance Institute for Highway Safety told Automotive News. “Consumers will pay for that when they go to insure one.”

Unsurprisingly, Tesla does not agree with data analysis or the proposed insurance hike.

“This analysis is severely flawed and is not reflective of reality,” a Tesla spokesperson told Electrek. “Among other things, it compares Model S and X to cars that are not remotely peers, including even a Volvo station wagon. Model S has the fastest 0 to 60 MPH time of any production car ever tested by Motor Trend, and Model X has by far the best acceleration of any SUV. Obviously, it is false and misleading to compare them to a station wagon without explaining this discrepancy.”

Whether or not other large insurers like Geico and State Farm will follow suit, only time will tell. Either way, it's just one more factor to consider before taking the all-electric plunge.

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