Farmer & # 39; s Insurance has J.K. Simmons of "Law & Order" fame hawking auto insurance. Allstate taps former TV president Dennis Haysbert, whom consumers should rely on for their cars. But can they beat the new sales pitch from Tesla boss Elon Musk?
Tesla announced on Wednesday that it now offers its own brand of California auto insurance for Tesla cars. CEO Musk teased the idea for the first time in April, and the automaker said on its website "it will expand to further US states in the future."
Tesla Insurance, as it is called, is "a competitive car insurance offer designed to provide Tesla owners with up to 20% lower rates, and in some cases as much as 30%," thanks to safety features like Autopilot, according to the company's announcement.
Tesla's entry into the auto insurance field received a warning and a welcome from the competition.
"Car insurance is one of the most competitive marketplaces in our economy, and US mutual insurance companies welcome the car manufacturers that offer coverage," a National Association of Mutual Insurance Companies spokeswoman told Fox Business Wednesday. However, companies offering coverage must be subject to the strict solvency and consumer protection regulations adopted by states to ensure they will be there when needed. "
F or its part, Tesla promised that they offer" comprehensive coverage and injury treatment to support our customers. "And in a bold way, the company added," Tesla owners in California can buy a policy of so little like one minute. "
Or maybe it's more than a minute because, within hours of the announcement, Tesla's official Twitter account revealed:" We're making some updates to Tesla Insurance and will be back online soon. "
Musk had previously stated that the electric car company was ready for a simple transition to the insurance industry, since it already has "direct knowledge of (the) customers' risk profile. "Musk maintained that Tesla's advanced safety features, such as the advanced driver assistance" Autopilot ", allow the company to keep insurance costs low.
However, Tesla emphasized that "do not use record vehicle data, such as GPS or camcorder recordings, when pricing insurance" on its regular FAQ page.
The transition to car insurance comes at a central time for the company, with Tesla shares down 1
|TSLA||TESLA INC.||215.59||+1.51  + 0.71%|
But Tesla believes that knowledge of the product will help offset the high insurance costs when it starts giving drivers their own insurance coverage.
"Because Tesla knows driving At their best, Tesla Insurance is able to leverage the advanced technology, safety and service of our cars to offer insurance at a lower cost. This pricing reflects the benefits of Tesla's active safety and advanced driver assistance features, which come standard on all new Tesla vehicles. ”
Tesla's insurance may prove to be a financial downfall because the company appears to be maintaining profitability, but the move may also be a bit of a gamble, as mounting claims could conceivably overwhelm the company's cash reserves.
Tesla Insurance offers a monthly payment with no hidden fees or charges, according to the company's announcement, where customers can cancel or change Tesla insurance policy at any time.
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