(Reuters) – Tesla Inc ( TSLA.O ) announced Wednesday the launch of an insurance service designed to provide lower fares to drivers in California, its largest market, due to electric vehicle safety regulations.
FILE PHOTO: The logo of the Tesla car manufacturer can be seen in a car at the Top Marques in Monaco on May 30, 2019 Car insurance rates should decline as driver assistance and self-drive technology become standard. Tesla said the odds of his new plan were up to 20% lower than those of his competitors, but no comparisons were made.
The company did not name an insurance partner, but the California Department of Insurance website revealed that Tesla was licensed as a broker for business on behalf of State National Insurance Company Inc, a unit of Markel Corp. ( MKL.) N ).
Tesla claimed that its Model 3 sedan had the least chance of injury for vehicles tested by the National Highway Traffic Safety Administration. The agency responded that Tesla made "misleading statements" and sent a letter of revocation to the company in October of last year.
According to security researchers and insurers, the company's cars are generally among the most expensive vehicles to insure due to their high component and sensor repair costs.
Tesla Model S and Model X topped the list of the most expensive ones in a Financial Analysts' 24/7 Wall Street report from 2018, which analyzed insurance claim and highway insurance claims and insurance costs Insure vehicles listed.
National Insurance Company representatives did not immediately respond to calls and emails asking for comments.
Tesla said it would offer "comprehensive coverage" and claims handling to California customers and would be extended to other US states in the future.
State National submitted an application for the Tesla Program in November 2018, approved by the California regulators in April.
Using data from vehicles and consumers reduces the cost of acquiring and maintaining insurance customers, State National wrote in a memorandum that was part of the application.
Data from Tesla vehicles will "reduce the frequency and severity of collision claims for Tesla owners" in autonomous mode. According to State National, insurance can be offered at a lower cost.
The insurance price also lowers certain fees charged by traditional insurers, Tesla said. The nature of these charges is unclear.
Reporting by Suzanne Barlyn and Tamara Mathias; Additional coverage by Tina Bellon in New York; Editing by Peter Henderson and Matthew Lewis