Tesla Inc. (TSLA) stock remains down over 3% since the start of November. The company is planning on disrupting the car insurance industry with the introduction of InsureMyTesla. The division is a car insurance company that plans to insure Tesla vehicles.
Tesla claims that the auto insurance industry should have declining premiums as autonomous vehicles hit the road.
The company claims that the auto insurance industry will decrease by 40% in the next 25 years resulting in savings for consumers. The car insurance product introduced by Tesla is in partnership with Liberty Mutual. Tesla offers a package similar to what they’re offering in the United States and in 20 other countries already.
“It’s our vision in the future we could offer a single price for the car, maintenance and insurance” claimed the company’s president earlier in the year.
Tesla’s autopilot features make vehicles safer. The company’s autopilot and autosteer features reduce crash rates by 40%. The features allow the vehicle to remain in the proper lane even when the vehicle is going along a curved road.
“If we find that the insurance providers are not matching the insurance proportionate to the risk of the car then if we need to we will in-source it,” Tesla CEO Elon Musk said.
Musk has not stated how much drivers can expect to save on their insurance premiums. “You must decide upon which insurance plan is going to be the most beneficial for you,” claims Carbestinsurance.
Multiple insurance companies state that driverless vehicles will have an impact on their business models. Transportation expenses, including maintenance and insurance premiums, rose 4.6% in 2016 to $2,884.
Transportation expenses are second only to a consumer’s household expenses, according to the Federal Reserve. Tesla plans to help Tesla owners keep their premiums down with their new product: InsureMyTesla.
Tesla’s insurance package is impressive at first look. The insurance package provides 24-hour roadside assistance to drivers along with rental vehicle reimbursement. The company also offers to replace any vehicle deemed a total loss during the first year of ownership. The product is currently only available to Tesla owners.
InsureMyTesla has been in the works since February when the automaker started rolling out their insurance offers in Australia and Hong Kong. The company has teamed up with insurance companies across the world to offer insurance options through InsureMyTesla. The company’s insurance company takes into account the vehicle’s autopilot safety features and reduces premiums accordingly.
AAA claimed earlier in the year that the company would increase insurance rates for Tesla vehicles. AAA claims that there is a high claims frequency among owners of the Model X and Model S, fueling the company’s decision to raise rates.
Owners can get their quote and buy online, or they can call the company’s 1-800 number. The package also offers a rate guarantee for one year as well as a Valet Service. The service will offer car owners the ability to schedule a car exchange or a drop off for their rental car. The service will drop the vehicle off at a time and place that has been previously agreed upon.