Tesla Launched Its Own Car Insurance

Mark Bova purchased a used 2018 Tesla Model S in February. Before leaving the dealership, he purchased Tesla insurance, calling the initial $93 monthly fee “really reasonable.”

Sixteen days later, he activated Autopilot, Tesla’s automatic driving system, as he drove down the Capital Beltway to his Maryland home. The car began to beep and lurched left, colliding with a median and tumbling. As the car filled with smoke, he escaped through a window. He was brought to the hospital in an ambulance with back injuries that required surgery.

“I’m a former Green Beret,” Bova said, referring to the U.S. Army Special Forces. “That was probably the second-most traumatic thing I’ve gone through other than being in combat.”

His ordeal is far from done. Tesla Insurance, launched in 2019, promised policyholders “vastly better” service than competitors, as Tesla CEO Elon Musk phrased it in April 2022. Musk also stated that he hoped to provide “same-day” crash repairs. However, Bova claims that he has been battling the insurer since the accident.

He claims he waited seven months for payment on the totaled vehicle and is still owed $50,000 in medical expenses. Because the collision featured Autopilot, he was instructed to contact the automaker’s product responsibility department. He says he waited on hold for hours and was hung up on four times. When someone finally responded, they said they’d call back in two weeks. He’s still waiting, four months later.

Tesla and Musk did not respond to detailed questions from Reuters for this report.

According to scores of complaints on social media and online blogs, including on a Better Business Bureau website, and Reuters interviews with half a dozen policyholders, Bova isn’t the only consumer Tesla Insurance has irritated. While some customers have applauded the insurer’s affordable premiums in online discussions, others, such as Bova, have complained about waiting weeks or months for refunds and repairs, as well as an inability to reach claims adjusters.

Tesla officials have stated that they formed the insurer to address a problem: prospective consumers walking away from car purchases after receiving exorbitant insurance estimates based on the high collision-repair costs of electric vehicles. According to numerous sources acquainted with the insurer’s operations, while promising to revolutionize automotive insurance, Tesla has at times run the business on a shoestring budget, at one stage with only about a dozen adjusters who were rapidly swamped by hundreds of claims.

The difficulties at the insurer fit into a pattern of hurried and incompetent management that has resulted in consumer and worker harm across Musk’s empire of technology and manufacturing enterprises. In the year since he purchased Twitter, now rebranded X, the billionaire’s decisions have come under scrutiny. Musk slashed the firm’s staff by more than half and implemented a series of unpopular platform changes, causing advertising revenue and company value to plummet. Following Musk’s endorsement of an anti-Semitic remark on X last week, numerous big corporations suspended their advertising on the platform. Musk denied having anti-Semitic views.

According to Reuters, Tesla staff shared sensitive footage and photographs of owners captured by the cars’ cameras, prompting two U.S. Senators to write Musk a letter noting that the piece raised “serious questions about Tesla’s management practices.” In July, the news agency revealed a deliberate effort by Tesla to overestimate the driving range of its vehicles, including by rigging the algorithm that governs in-dash estimations, prompting a government inquiry and several class-action lawsuits.

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