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Doesn't insurance segment by model? Or are you saying that 10% of a $10k tesla repair is $1k in overhead, and that gets amortized across the customer base?
by ingenuous2 9y ago
Doesn't insurance segment by model? Or are you saying that 10% of a $10k tesla repair is $1k in overhead, and that gets amortized across the customer base?
- Retric 9y agoNo, the argument is that when a Tesla is not at fault then some other insurance company is paying more money to fix a Tesla than say a similar BMW.
- jaclaz 9y agoExactly. Imagine that there exists only one insurance company (additionally non-profit) and that only 100 cars - all in the same, single segment - exist, that have (invariably) 10 collisions with another car per year. If the average cost for repairs is US$ 10,000, for the system to work the total amount of rates must be 10x10,000=100,000 and thus each car owner will pay 100,000/100= 1,000 US$. Now introduce a new car that replaces a large part, let's say 50% of the (only) segment. When these new cars are involved in an accident, (and their driver is not at fault) the repair costs double to 20,000 US$, so if on average you will have 5 accidents costing 10,000 as before and 5 costing 20,000, the total costs will raise to 150,000. The insurance company will either leave the 50 "normal" cars at 1,000 and thus raise the rates of the 50 "more expensive" cars to 2,000 OR spread the difference by raising everyone's rates to 1,500.