Elon Musk took matters into his own fingers today and pumped the new Tesla auto insurance on Twitter. The rock-star smart-guy, known for space travel and smoking weed on podcasts, tweeted that his company’s new insurance should be “20% less than [average].” At the end of the tweet, he asks for “critical feedback.” He got it.
The Musk distrust was strong on Tuesday. One user asked the Tesla CEO how he planned to insure for the high fire and death rates for Tesla. According to a report by the Highway Loss Data Institute (HLDI), Tesla had the highest rate of non-crash fires. The same user also wondered if Tesla’s higher death-rate was included in the price of insurance.
Another user claimed that insurance is only cheaper because the default coverage on the home page is “awful.”
Some people even said the price of their coverage went up with Tesla’s insurance. The tweets came days after Tesla paused insurance sales to update their algorithm. Some thought the update came in response to similar claims of high quotes.
Tesla launched its auto insurance services last Wednesday despite Warren Buffett’s warning to steer clear of the industry. Buffett said earlier this year that,
“The success of the auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business.”
Musk rebuked the billionaire hedge-fund manager by claiming he said Teslas were “1000 times more fun” than Honda Accords.
Not everyone hates Musk’s new insurance model. A number of different Twitter fans said their insurance was lowered with Tesla. One even claimed his rates were cut in half.
How does the company manage to offer such low-rates? According to its website, Tesla can offer these rates “by pricing policies to reflect Tesla’s active safety and advanced driver assistance features.” Obviously, Tesla’s safety could be a bit more active. A more likely reason they can offer lower rates is that they spend no money on ads.
While it remains to be seen if Tesla’s new insurance will succeed, it’s certainly off to a shaky start. But after navigating his way out of Chinese tariffs, Musk clearly has a few tricks up his sleeve.