So Much For Autopilot Safety: AAA To Increase Model S And Model X Policy Rates Due To High Claim Frequency

You would expect this to happen - When a Company is the ONLY source for parts - and NONE are available aftermarket - there is no competition and the prices are astronomical. I have spoken against the Tesla sales model - and this is just another example of how it really is not in the customers favor.

Some have offered that there is no middle man which should lower prices - BUT - it is actually the lack of competition that would keep the prices higher. Most AutoBody shops in my area receive large discounts from their local dealers for parts for other cars- because if they don't offer them - another dealer will. If you can only deal with ONE supplier for the whole USA - you are effectively bidding the price of the parts UP - and have no alternative.

"I can't wait till Tesla's Marketing and PR representative shows up here to defend this."

What's the point of defending Tesla on a site that 1) Runs only articles that are negative about the company, and 2) Seems to be read by a grand total of 6 people who all are foaming at the mouth waiting for the next anti-Tesla article.

It seems pretty clear that this site is sponsored or owned by a Tesla competitor who can't compete in the marketplace and can only crank out BS articles about them. Here's a tip: No one reads this crap, no one cares, have fun stroking each other in your anti-Tesla bubble.

Tesla should have never installed that sign where Tesla autopilot car drive.

I'm not so sure Tesla will win this argument. Between "propped up" residual/resale values, between "free" supercharging, and between "Tesla is a really safe car".... these platitudes from Mr. Musk and Tesla PR seem likely to be 'half-truths'. Insurance issues will likely prove to be one more nail in the Tesla coffin. Here is some recent reporting..

(Take-aways - (a) people who buy 'cheap' cars will struggle to buy 'expensive' auto insurance; (b) Tesla's with seemingly minor damage are showing up in salvage yards as 'totaled' (ask Tesla how many have been totaled - lots of photos on the internet); (c) Tesla's are not really as safe as claimed.)

Due to its quality problems and high repair costs, Tesla has a big insurance problem. It has been predicted that Tesla cars will end up having some of the highest insurance costs. These costs drive up the cost of ownership and further drive down the desirability and resale value of older Tesla cars.

AAA noticed anomalies in its own claim data and confirmed them by examining a broader study conducted over a two-year period by the Highway Loss Data Institute, which is operated by the highly-regarded Insurance Institute for Highway Safety (IIHS).

The Highway Loss Data Institute report covered the 2014-16 model years. Vehicles are divided into classes based on size, weight and competing models. The frequency and severity of claims are compared with overall average claims of passenger vehicles and the average claims of the vehicle's class. In evaluating Tesla vehicles within their categories and to the overall population of vehicles, the report found the amount and cost of claims to be much higher than average.

"Teslas get into a lot of crashes and are costly to repair afterward," said Russ Rader, spokesman for the Insurance Institute for Highway Safety, which is the Highway Loss Data Institute's parent organization. "Consumers will pay for that when they go to insure one."

Other large insurance companies, including State Farm and GEICO, are said to be examining their own actuarial data about Tesla claim experiences. GEICO is owned by Berkshire Hathaway (NYSE:BRK.A), AAA is privately-owned, and State Farm is a mutual insurance company owned by its policyholders.

Tesla is challenging AAA's determination, calling the Highway Data Loss Institute's study "severely flawed" and "not reflective of reality."

It has always struck me, though, that Tesla cars are easy to total and expensive to repair. Until now, that was just a feeling, based on anecdote, including forum posts by Tesla owners bemoaning the high costs of repair and photos of what appear to be lightly damaged Tesla vehicles in salvage yards

However, rising rates could have important implications for the Model 3. For people in the income brackets targeted by Tesla's forthcoming compact sedan, the Model 3, an extra $50 per month of extra expense on the insurance premium could be a make-or-break number. The same is true for buyer

If the insurance industry claims higher premiums are due to Tesla's Autopilot feature, then I hope Tesla offers an option to permanently deactivate the feature, just to take that excuse off the table for Tesla owners to have jacked-up insurance premiums.

Insurance companies always have ten+ excuses in hand to increase rates. If not for the autopilot, then it would be the amount of aluminum used, or electronics, or . . .

This sucks for sure and will only push Tesla to offer their own competing insurance packages at lower rates like they do in Asia. FYI, the increase is not related to Autopilot but a multiple of the frequency of accidents and cost to repair. There is at least one insurance company offering discounts for Autopilot equipped cars.

I pay ~$100/mo for insurance on the Model S, which is the same rate as my previous Lexus. I feel like I have a good rate now, but I won't be thrilled if it goes up 30% :/

You have to be a total fool to think they will be bankrupt in 2017. Even the harshest critics would but silly to think that is a possibility. Put your money where your mouth is and short Tesla stock =)

that article pic is hilarious

"Bankrupt by the end of the year."

Nice try! GM will be bankrupt before Tesla. You know it. I know it. And no bail out this time.

You know it's a quality and balanced auto site when a guy that actually owns a Tesla and comments on his insurance rates gets downvoted, and the same clowns who dump on every Tesla article upvote themselves in the automotive chatroom equivalent of a circle jerk.

Tesla is here to stay. When the Model 3 launches the auto market will never be the same. There will losers (other than the hacks posting here), as the companies unable or unwilling to innovate will see their share drop like a stone.

I don't work for Tesla but I do think you will notice a pattern with Tesla owners... they f*ing love their cars. Most other makes do not illicit the same level of passion for the product, that should tell you something. For me it has nothing to do with it being "green" -- it is a phenomenal product that I really enjoy using, and thanks to the traffic where I live I use it a lot.

I would bet (and have bet in terms of stock ownership) a lot that Tesla is going to be around for a very long time.