Tesla is about to launch its own in-house insurance program in more states after running it in California for the last year.
In 2019, Tesla launched its own insurance program, starting with availability in California, where the automaker claims up to 30% cheaper premiums than the competition.
It’s Tesla’s second entry in the insurance industry after its InsureMyTesla program in partnership with third-party insurers.
The new program is directly brokered by Tesla through State National Insurance, and the automaker is much more involved in the entire process – basically becoming an insurer itself.
It was always the plan to expand Tesla Insurance to more states, but it has proven difficult as the automaker has to navigate regulatory environments in different markets.
Furthermore, Tesla CFO Zach Kirkhorn said that the company was waiting to complete its insurance offering by integrating more telematic information before expanding to other states.
According to a new report from Forbes, Tesla is now actively seeking to expand its insurance business in three more states:
Palo Alto, California-based Tesla already offers auto insurance in California and is seeking permission from state regulators to offer coverage in Illinois, Texas, and Washington.
Tesla plans to use its connected features inside its vehicles, including its driver-assist features, in order to provide an insurance product that is more accurate and cheaper than the competition.
In California so far, many customers have indeed reported paying less with Tesla Insurance.
CEO Elon Musk is extremely bullish about the product:
And as we’ve talked about before, with a much better feedback loop, instead of being statistical, it can be specific. And obviously, somebody does not have to choose our insurance. But I think a lot of people will. It’s going to cost less and be better, so why wouldn’t you?
He estimates that Tesla Insurance could reach a valuation that represents 30% to 40% of Tesla’s car business.
It’s unclear when the new offering will be available in those three additional markets, but Tesla is now actively working on it.
In California, fillings have also reportedly showed that Tesla is also already working on offering autonomous vehicle insurance to prepare for when the liability will shift from the driver to the system.
That’s something that Musk claims Tesla could do by the end of the year pending regulatory approval.
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