Tesla auto insurance is now available in five states, and the company plans to continue its rollout nationwide, company executives said Thursday (Jan. 27).
“Our internal goal here, by the end of the year, is to be in enough locations that 80% of our customers within the U.S. could choose to sign up for Tesla insurance if they wanted to,” said Tesla Chief Financial Officer Zach Kirkhorn during the company’s fourth quarter 2021 earnings call. “There’s a lot of uncertainty around that based upon the regulatory processes, but that’s our goal.”
The company has been offering auto insurance for about three months. In four states — Texas, Illinois, Ohio and Arizona — Tesla offers telematics auto insurance that monitors driving behavior and sets rates accordingly.
Read more: Tesla Starts Rollout of Auto Insurance Based on Driving Practices
In the fifth state in which it currently offers auto insurance, California, Tesla offers a more traditional product because the state doesn’t allow insurance companies to base their rates on drivers’ behavior.
“We are pushing very hard for California to change the rules to allow informatics, which basically means that you’re as safe as your driving is measured,” Tesla CEO Elon Musk said during the call. “So, I think the current California rules are contrary to the best interest of the consumers in California and should be changed.”
Based on what they’ve seen during the first three months of the program, the executives said the drivers covered by telematics auto insurance are less likely to be involved in collisions. They noted that the telematics give drivers feedback on their driving behavior, and the insurance rewards good behavior with lower rates.
“We give people direct feedback on whether they’re driving safe, and if they drive safer, their insurance costs less, so they drive safer,” Musk said. “Tesla insurance with informatics and real-time feedback encourages safer driving and rewards it monetarily. It’s great.”
In the first state in which the program was launched, Texas, the take rates have been strong, and the loss ratios have been what the company expected. Based on what Tesla seen there, the company plans to expand the program across the country as quickly as it can, although it will have to do so state by state, as auto insurance is regulated at the state level.
The company plans to then turn its attention to expanding Tesla auto insurance to European markets. Depending upon its progress in the U.S., it may do that by the end of the year.
In other news, Musk said during the call that he expects Tesla’s Full Self-Driving (FSD) capability to drive more safely than humans by the end of the year. FSD is an advanced driver assistance system that reduces the driver’s workload but requires the driver to have their hands on the steering wheel, ready to take control.
“There are several profound improvements to the FSD stack that are coming in the next few months,” Musk said. “So, I would be shocked if we do not achieve Full Self-Driving safer than a human this year. I would be shocked.”
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