Tesla is preparing to expand its insurance business internationally – starting with insurance products in the United Kingdom.
The automaker originally introduced its own insurance product in California, but it didn’t utilize real-time driving data or Tesla’s safety score, which had been the original goal.
Before expanding its insurance product to other markets, Tesla wanted to build up its safety score system, which utilizes driving data collected in real time from Tesla vehicles to determine if you are a “good driver” based on things like the number of “Forward Collision Warnings” you get, the amount of hard braking you do, aggressive turning, unsafe following distance, and if you get forced Autopilot disengagements.
In October 2021, Tesla finally launched its new insurance product based on the safety score in Texas.
The automaker says that it expects those deemed “average” drivers based on their safety score should save 20% to 40% on their premium compared to competitors, and those with the safest scores could save between 30% to 60%.
In a review of some quotes comparing the existing premiums for Tesla drivers, it was hit or miss on whether Tesla’s product was cheaper or not. There seems to be a bigger difference for those who already had a high premium based on age and gender, which Tesla insists it is not using in its own premium calculations, unlike other insurance companies.
Also, when first quoting and starting a policy, Tesla assumes a safety score of 90. The monthly premium price can quickly go down if you improve this score.
Tesla released an example that shows how the premium can change month to month depending on your score:
Since releasing the product, Tesla has integrated everything into its mobile app, from ordering insurance to using the safety score to paying and managing claims.
In April, Tesla launched insurance based on real-time driver data in Colorado, Oregon, and Virginia.
The rollout is not happening as fast as Tesla anticipated as CEO Elon Musk stated that he believes Tesla Insurance would be in most states by the end of last year.
But now we learn of Tesla preparing its insurance business expansion internationally – starting with the UK.
The UK’s Insurance Post (via City AM) reports that Tesla started the process, and it is hiring a lawyer to work in its “full-stack in house in insurer” based in its London headquarters.
The UK has rapidly become one of Tesla’s most important markets as new car buyers are increasingly turning to electric vehicles.
Despite a higher sticker price, electric vehicles can result in a much lower cost of ownership, but Tesla has often been subject to higher insurance rates from established companies.
By offering its own product, Tesla hopes to reduce the cost of insurance for its owners and, in turn, reduce the overall cost of ownership.