Can Tesla make the best insurance program?

I expect I paid at least $100/month to be insured since I was 16 and that ends up totalling $27,600.

I gave $27,600 in exchange for some pink slips mailed to me each year. I expect that cost ended up being about $30. No other company has charged me so much and given me so little. The insurance industry is a tough business? Why, because you have to repair cars and settle claims? Is that really harder than making production lines and sourcing parts that assemble 1000 cars/day? Then delivering those cars and keeping them serviced?

Assuming Tesla pulls off best vehicle safety with autonomy, their number of submitted claims should be lower making them even more profitable as an insurance company. If cars can submit videos of accidents proving others are at fault, they will also have less liability. Combine this with the ability to trigger parts being ordered and Service queued immediately, the user experience for owners would be optimal with Tesla insurance.

What Tesla charges may very from driver to driver, but lets look at it from my average monthly payment of $100/month.

A Service Ranger making $60K/year would earn $5000/month. So for every 50 people who subscribe to insurance, Tesla would collect enough money to hire an Insurance Employee or Service Ranger.

Tesla tends to leave little to no room for improvement when they set out to do something. In fact, I would expect that warranty and insurance becomes a single package where one monthly fee results in a complete coverage of anything that goes wrong with your Tesla. With the addition of trained Rangers graduating Tesla will slowly get faster and faster at responding until they can provide next day or even same day service.

Taking care of the fleet is very important for Tesla’s future. As their leased vehicles transition to their responsibility to insure and maintain, it will be an ideal position for Tesla to be able to insure them in house and maintain them at cost. It broadens the gap in competition for cost per mile (unless Lyft and Uber start insurance companies too). If the cost of insurance was factored into Tesla mobile taxi cost per mile, it may reduce that by up-to 11%.

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jsturgis