AAA plans to raise its auto insurance rates on Tesla vehicles by as much as 30 percent in the coming months. The insurer claims that data reveals the Model S and Model X have abnormally high claim frequencies and high costs of insurance claims compared with other cars in the same classes.
Tesla disputes the analysis.
“This analysis is severely flawed and is not reflective of reality,” the automaker told Automotive News. “Among other things, it compares Model S and X to cars that are not remotely peers, including even a Volvo station wagon.”
However, AAA said that after finding the higher claim rates in its own data, it searched other sources and found similar results, thus necessitating the move to charge the higher rates. No word yet on if that policy will apply to the Model 3 when it hits the market later this year.
“Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates,” said Anthony Ptasznik, chief actuary of AAA-The Auto Club Group.
Automotive News reported that other large insurance companies, including State Farm and Geico, said that claims data is a major factor in calculating premiums, but would not disclose if their Tesla-owning customers would also see rates rise.
One source, the Highway Loss Data Institute, divides vehicles into classes based on size, weight and competing models. It compared the frequency and severity of Tesla claims and found that within their categories and to the overall population of vehicles, Tesla had more claims and higher costs 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.”
The Model S is classified as a large luxury vehicle, comparable to the Volvo XC70, Audi A6, Mercedes-Benz E class and BMW 5 series. Tesla claims that the performance, in particular the acceleration, of the Model S and Model X make it “false and misleading” to compare against vehicles like the XC70.
The company also believes that its vehicles are safer than other vehicles, citing evaluations from the National Highway Traffic Safety Administration. Tesla said when compared with similar rivals, its crash data does not stand out negatively.
But according to the institute, the rear-wheel-drive Tesla Model S is involved in 46 percent more claims than average, and those claims cost more than twice than average; Model X owners file claims 41 percent more often than average, and those claims cost 89 percent more than average.