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.
Try Tesla Insurance. Should be ~20% less than avg. Currently only in California, but expanding soon. Critical feedback much appreciated. https://t.co/L8xv8vxllj
— Elon Musk (@elonmusk) September 3, 2019
Elon Musk Truthers Out in Full Force
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.
IIHS just reported that Teslas have 2-4x the fires compared to regular cars, with up to 7x the damages.
How do you plan to insure that?https://t.co/VPFwH9OxwY
— Bachman (@ElonBachman) September 3, 2019
Another user claimed that insurance is only cheaper because the default coverage on the home page is “awful.”
Its not actually cheaper you just set the default to awful coverage so that makes the sticker price deceivingly cheap
— Elmer Spud (@PlugInFUD) September 3, 2019
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.
Was more expensive in my case. I want to give you more money sir, we got two model 3 but coverage was less and $900 more / vehicle , me = face of sadness
— Ivan Vazquez (@socalivan) September 3, 2019
I believe it’s great for most but Tesla quote was ~50% more than current insurance with Geico ($1125 vs $750) for the same coverage.
— Doug Simpson (@dougsimp) September 3, 2019
Buffett Warned Tesla Against Auto Insurance
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.
That’s a direct quote from Warren Buffett
— Elon Musk (@elonmusk) May 4, 2019
Musk Still Has Plenty of Fans
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.
— Mark Linsangan (@HeyMarkL) August 30, 2019
— Raymond Luong (@luongray) August 30, 2019
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.