Technology for cars is soaring like never before. Safety features and autonomous tech is on the cusp of exploding into the mainstream, and Tesla, one of the major players behind this tech, is looking to benefit the most. However, there is the problem with insurance rates, and Tesla hopes to have a hand in making some changes.
With risks going down due to new safety tech (in theory), Tesla is asking insurance companies to consider how policies should change as cars become safer, a move that I suspect will be very unpopular amongst insurance companies. Since the installation of Autopilot, crash rates for Tesla vehicles have dropped 40% (according to the NHTSA).
Farmers Insurance, which is in a partnership with Teslaloop, is the most recent example. Teslaloop is a small ride-sharing service that operates out of Southern California using Tesla vehicles. Farmers drafted a new auto policy for Teslaloop that cuts the service’s previous costs by 25% by reducing its risk premium. However, Teslaloop declined to dole out any specifics regarding the exact figures.
Mariel Devesa, Farmers’ head of production innovation, mentioned that this partnership gives Farmers a small test case to see what sort of insurance policies can be designed around autonomous technology:
“For us it’s understanding what is new technology and then understanding what are the business models of these new products that are trying to disrupt the industry.”
Teslaloop is currently very tiny (6 cars total), but if anything, it gives us an early look at how insurance pricing could potentially be turned on its head due to upcoming autonomous and safety tech. In fact, Tesla intends to offer insurance with its vehicles at some point, something that is already in effect in Australia and Hong Kong.
SOURCE | Business Insider