A new interview with Tesla’s former vice president of insurance has shed light on just how much of a liability its cars – and potentially other electric vehicles as well – are to insurers. A snippet of it tweeted by investment research house In Practise revealed that as much as 40% of crashed Teslas insured by the carmaker in the US ended up being total losses.
This high ratio has allegedly caused Tesla Insurance to run at a 150% loss ratio , said the former exec. However, the company was making money off salvaging parts “because I was getting such high returns,” although there were issues with salvage companies like Copart and IAA mishandling batteries, either by not charging them or damaging their casings with forklifts.
The high repair costs and insurance premiums were what spurred Tesla to set up Tesla Insurance in 2019. The company promised 20% lower premiums compared to rivals, later basing them on a “safety score” determined by tracking real-time driving behaviour, including how often collision warnings were triggered.reported on issues faced by Tesla Insurance customers, including long waits for repairs and payouts and high premiums due to false collision warnings.