4 ms·

Even Tesla's Insurance Arm Is Getting Wrecked

bionhoward 1y ago
Looks like the loss is getting closer towards profit over the last few years, maybe they’re just still figuring it out?
notatoad 1y ago
the article seems to conclude that this is because of tesla's repair or manufacturing practices. but anecdotally, white model 3s are the scariest cars on the road, driven by the worst drivers, most likely to do dangerous and unpredictable things. i certainly wouldn't want to be in the business of insuring tesla drivers and the data seems to back me up - tesla has the highest crash rate of any manufacturer: https://www.forbes.com/sites/stevebanker/2025/02/11/tesla-again-has-the-highest-accident-rate-of-any-auto-brand/ https://www.forbes.com/sites/stevebanker/2025/02/11/tesla-ag...
- treetalker 1y ago
  Curious: why white Model 3s specifically?
  - ljlolel 1y ago
    Cheapest car. A different color costs more $.
    - jerlam 1y ago
      The "free" color rotates - the current one for the Model 3 is "Stealth Grey". According to the site below, white was the free color from 2020 - 2024, which was probably when the bulk of Teslas were sold, especially to places like Hertz who have been dumping them on the used car market. https://www.findmyelectric.com/tesla-colors-model-s-3-x-y/#model-3-colors https://www.findmyelectric.com/tesla-colors-model-s-3-x-y/#m...
      - tzs 1y ago
        Wait...they only have one free color at a time? Is that just a Tesla thing or are there any other widely sold cars that do that? Every car I've considered buying has had several free colors and several colors that cost extra, so I just assumed everyone did that.
  - pfannkuchen 1y ago
    [flagged]
    - rideontime 1y ago
      I assume you have some evidence to back up this claim of “population level statistics,” or you wouldn’t have used such language.
      - yibg 1y ago
        It’s a weird claim in this context especially because Asians are statistically involved in fewer major accidents.
        pfannkuchen 1y ago
        The sort of driving issues that recent first generation learners have is different from the sort of issues that people who drive into trees while speeding or engage in DUI have. These can both be true at the same time. I know everyone is morally allergic to any statement pointing out group differences, even ones that are not about innate differences, and the mind will gravitate towards any other available explanation.
        yibg 1y ago
        The allergy is to broad claims without evidence. Point to some data that indicates more insurance money is paid out to Chinese drivers then we can have an actual discussion.
        pfannkuchen 1y ago
        Insurance companies do not externally publish data aggregated by the relevant dimensions, and they do not publish raw data for us to aggregate ourselves. Let’s for a moment take as a premise that what I’m saying is true. In that version of reality, with all else held constant from our current known reality, would we expect the data publishing to be any different from what we see? It is a politically sensitive topic, after all. Which is to say, an absence of evidence is not evidence of absence. I won’t publish a book on this topic due to lack of sources. I think discussing it on an Internet forum is acceptable? I maintain that the impulse to demand sources in such a case comes from moral offense which is then misattributed to epistemological structure offense.
- CharlesW 1y ago
  I can only speak to my area, but Tesla drivers north of San Diego started driving noticeably less idiotically when local dealerships started to be regularly protested.
  - pfannkuchen 1y ago
    I have seen less Teslas around in general since that started. I used to regularly wait in line at the charger, and lately there has been no line. What you noticed could be a deeper correlation between driving ability or conscientiousness and who is more influenced by perceived social pressure to stop driving a type of car. Most Tesla owners also have a gas car, so it’s not as if they need to purchase a new vehicle to change their driving habits. Another explanation might be that the crazy driving was mostly from new owners before they got used to the acceleration, and with fewer new owners now the crazy driving has reduced.
    - stevenjgarner 1y ago
      > Most Tesla owners also have a gas car Really? Do you have a citation for that? Tesla has sold over 7.25 million vehicles [1]. I could believe that Tesla owners have proportionately higher ownership of a 2nd vehicle, but most of them? [1] https://backlinko.com/tesla-stats https://backlinko.com/tesla-stats
      - ninalanyon 1y ago
        It's possibly true that in the US Tesla owners have an ICE car. Definitely not true here in Norway.
hn_throwaway_99 1y ago
This is kind of buried in the article, but it annoys me when articles lead with a clickbait title and then basically admit in their own article how their clickbait title is bullshit. That is, even though the loss ratio is much higher than the industry average and indicates a loss, it has been going down for the past 3 years (116.6 in 2022, 114.7 in 2023, and 103.3 in 2024). I would expect that any startup offering would start out with a loss that then eventually turned to a profit over time. All that said, I think Tesla and the EV industry as a whole will need to do a lot to bring down their repair costs. It's insane that these cars are designed in such a way that even minor fender benders cost tens of thousands to repair. I actually think government should create liability limits for vehicles to incentivize car makers to make repairable cars. That is, if you're driving around with a Faberge egg as a hood ornament, and I ding it, I don't think I should be responsible for the outrageous repair charges - the recklessness was on your side, in my opinion, for putting such a fragile/expensive machine on public roads. Otherwise car makers have little incentive to improve the repairability of their cars.
- moomin 1y ago
  I think the real problem here is that many of the things that get wrecked are specifically designed to get wrecked rather than the driver.
- philjohn 1y ago
  It doesn't help that the official Tesla repair guide essentially says "Order a new side panel for the car, cut the damaged section from the car, weld in part of the side panel". And the side panel in this case stretches the entire length of the car.
- bob1029 1y ago
  > I actually think government should create liability limits for vehicles This is effectively already a thing in most US insurance markets. TDI (Texas) requires $25k minimum coverage for property damage, so in general this is what everyone is going to have. If your car is worth more than that and someone runs into you and totals it, you are ~fucked unless you have additional un[der]insured motorist coverage on your side. Suing someone for the difference is a 10/10 nightmare experience. Many people who are driving like ass also seem to have really bad financial situations. There is such a thing as being so poor that you are judgement proof. The overall effect of this is that drivers of high value (i.e., luxury) vehicles typically take it upon themselves to ensure the safety of their property. They don't make it the problem of everyone else. If their Faberge egg of a lambo gets wrecked, they understand the other parties probably aren't going to be able to replace it. Certainly, follow through with everyone's insurer and wring every policy dry, but the rest is up to the presumably wealthy luxury vehicle owner. If you are driving a luxury vehicle and cant handle the risk of an underinsured driver totaling it, you should question if you can actually afford the vehicle.
throwanem 1y ago
Oh, Tesla has its own insurance underwriter? That's normal for an automaker, right?
- mschuster91 1y ago
  Dealing with anything financial has been the norm for car manufacturers for many decades. Germany's Volkswagen for example has its own insurance and banking arm. The bank got established in 1949, however I couldn't find out when they expanded in insurance. Kinda makes sense - selling cars is a cut-throat business with ever tighter margins, the real money is to be made in financing/leasing, insurance and aftersales services.
  - throwanem 1y ago
    I'm not saying I can't see sense in that level of integration, just that I can't think of another automaker offhand that does business in the US that way, underwriting auto insurance policies specifically through a wholly owned subsidiary. Maybe I would know differently if I'd ever bought a car new off the lot, but I'm still driving the one I bought in 2019 and back then it still made sense to look at buying new as mostly a waste of money.
    - Misdicorl 1y ago
      The story I've heard is that general motors down fall began when they stopped writing loans for other car manufacturers. They used to under write basically every car loan in the US. I've never looked into how truthful it is, but it smacks of idiotic/arrogant executive tropes so well I almost don't want to discover it's false
      - throwanem 1y ago
        Oh, I see, I wasn't clear. I meant specifically a policy underwriter, as opposed to something like GMAC of old. I've updated my original comment with the necessary adjective. Looking over GMAC's history via Wikipedia, I find they did underwrite insurance for a time and that no other US insurance company originated within an automaker. That suggests to me Tesla's operating model here is indeed about as unusual in context as I originally - well, intuited, I suppose. I think that's interesting.
fifilura 1y ago
Major Swedish newspaper Dagens Nyheter just ran a story that the insurance cost for a Tesla has almost doubled in a year. While others remained more or less stable. (Quaterly cost, full insurance) Tesla Model 3: 3 338 kronor (70,3 percent increase since Q1 2024) Tesla Model Y: 4 007 kronor (97,3 percent increase) Kia EV6: 938 kronor (-4,7 percent) Volvo EX40: 1 097 kronor (-9,8 percent) https://web.archive.org/web/20250510192608/https://www.dn.se/ekonomi/forsakringspremier-pa-tesla-stiger-kraftigt/ https://web.archive.org/web/20250510192608/https://www.dn.se... They speculate the reason is that relatively few companies insure Teslas. Maybe because they have their own insurance company, or maybe because the leasing company take on the risk. I don't know how this works exactly.
- tough 1y ago
  one would think the global -lets deface teslas- movement might have something to be with insurance premiums going up for teslas no?
  - redox99 1y ago
    That's unlikely to be a significant percentage of insurance claims.
    - tough 1y ago
      so its more about tesla's owners being bad drivers then?
      - justanotheratom 1y ago
        one legitimate explanation I have heard is that when a Tesla gets in an accident, even with minor damage, they have to replace the Battery, because they are not able to accurately assess the damage to battery and the risk of not changing it. This balloons the insurance cost.
        tptacek 1y ago
mrweasel 1y ago
Can someone explain Tesla to me, assume I'm an idiot. If Tesla sales are down, the Cybertruck is an unmitigated failure and now they are losing money on insurance, then why on earth is the Tesla stock not going down? Not only is the stock not going down, it's doing well, up almost 5% year-over-year.
- deadbabe 1y ago
  From what I gather it’s mostly propped up by people who believe Tesla will be more than just a car company but will instead expand out into some general robotics company. Which is really pretty standard for any tech company whose valuation doesn’t make sense. People are betting the future will be brighter and have more revenue from new products.
- testing22321 1y ago
  People buy stocks betting on their guess of what will happen in the future. Toyota = safe, predictable, steady ship Tesla = wildly profitable for many for years, but incredible unpredictable. It seems many are still guessing it’s going to go up in the future.
- __MatrixMan__ 1y ago
  I don't understand it either, but I think it means that more needs to be done. We must establish that tinkering with politics was a good way to scare off investors. These investors are not yet scared enough.
- voidspark 1y ago
  Tesla stock is extremely volatile. It dropped 56% from the high in december, and is now trading at 40% below the all time high.
  - mrweasel 1y ago
    So investors shaw the stock hit 400+ and now they're betting it will do it again?
    - 1y ago
powerbroker 1y ago
I was driving the Model X a few years ago and ended up T-boning a minivan at ~45 MPH. Minivan rolled over. Our airbags deployed. Post accident, I discovered my glasses remained on my face and it seemed that the airbag did not even reach my body -- with the webbing taking the bulk of the impact. Car took months to repair and ~$30,000. Not bad when you consider we were driving to the hospital at the time, and the accident prevented us from reaching the hospital as well as preventing us from calling on an ambulance. 3 'assists' that the car gave us: 1. Crumple zone is bigger; 2. Battery made our vehicle heavier; 3. (speculatively), the 'crumple parts', crumpled more and costed more -- leading to less (none) bodily injury.
- testing22321 1y ago
  The Model S and Model X were the first two vehicles to get 5 star crash safety in every category from the US and the EU. Supposedly broke the testing machines (leading to Elon saying 5+ stars) They are among the safest cars on the road.
  - jeroenhd 1y ago
    >Supposedly broke the testing machines That doesn't sound like a good thing at all? Then again, I'm hardly surprised that the guy who tried to build an aluminum tank and sell it as a car would claim it is.
    - Rygian 1y ago
      As the story goes, the machine that broke is a press that is supposed to crush the car roof. The car roof withstood the pressure, the press did not. It's supposed to happen the other way around.
  - AtlasBarfed 1y ago
    I remember that when the release versions about 10 years came on the market, but I have not heard those claims in quite a while from any credible sources. I am certainly not authoritative. My vague recollection is that offset crashes Tesla didn't do quite as well at, so since then Tesla's ironclad safety rating has since waned
_xerces_ 1y ago
If Tesla Insurance is paying out for parts to fix damaged Teslas aren't Tesla effectively paying themselves and so recouping some of the paid out monies? Sure, it goes on a different balance sheet, but it's all Tesla in the end. On second thought maybe this loss ratio is based on buying parts at cost from the auto division and so there is still a loss there to Tesla who has to supply them from China or whereever.
- analog31 1y ago
  Some of the traditional insurance companies do this too, by having an ownership stake in the repair facilities, so they also buy repairs "at cost."
zombiwoof 1y ago
Hey let’s put Musk in charge of the US Government he’s such a fixer , he gets it

Looks like the loss is getting closer towards profit over the last few years, maybe they’re just still figuring it out?

the article seems to conclude that this is because of tesla's repair or manufacturing practices. but anecdotally, white model 3s are the scariest cars on the road, driven by the worst drivers, most likely to do dangerous and unpredictable things. i certainly wouldn't want to be in the business of insuring tesla drivers and the data seems to back me up - tesla has the highest crash rate of any manufacturer: https://www.forbes.com/sites/stevebanker/2025/02/11/tesla-again-has-the-highest-accident-rate-of-any-auto-brand/ https://www.forbes.com/sites/stevebanker/2025/02/11/tesla-ag...

treetalker 1y ago
Curious: why white Model 3s specifically?
- ljlolel 1y ago
  Cheapest car. A different color costs more $.
  - jerlam 1y ago
    The "free" color rotates - the current one for the Model 3 is "Stealth Grey". According to the site below, white was the free color from 2020 - 2024, which was probably when the bulk of Teslas were sold, especially to places like Hertz who have been dumping them on the used car market. https://www.findmyelectric.com/tesla-colors-model-s-3-x-y/#model-3-colors https://www.findmyelectric.com/tesla-colors-model-s-3-x-y/#m...
    - tzs 1y ago
      Wait...they only have one free color at a time? Is that just a Tesla thing or are there any other widely sold cars that do that? Every car I've considered buying has had several free colors and several colors that cost extra, so I just assumed everyone did that.
- pfannkuchen 1y ago
  [flagged]
  - rideontime 1y ago
    I assume you have some evidence to back up this claim of “population level statistics,” or you wouldn’t have used such language.
    - yibg 1y ago
      It’s a weird claim in this context especially because Asians are statistically involved in fewer major accidents.
      - pfannkuchen 1y ago
        The sort of driving issues that recent first generation learners have is different from the sort of issues that people who drive into trees while speeding or engage in DUI have. These can both be true at the same time. I know everyone is morally allergic to any statement pointing out group differences, even ones that are not about innate differences, and the mind will gravitate towards any other available explanation.
        yibg 1y ago
        The allergy is to broad claims without evidence. Point to some data that indicates more insurance money is paid out to Chinese drivers then we can have an actual discussion.
        pfannkuchen 1y ago
        Insurance companies do not externally publish data aggregated by the relevant dimensions, and they do not publish raw data for us to aggregate ourselves. Let’s for a moment take as a premise that what I’m saying is true. In that version of reality, with all else held constant from our current known reality, would we expect the data publishing to be any different from what we see? It is a politically sensitive topic, after all. Which is to say, an absence of evidence is not evidence of absence. I won’t publish a book on this topic due to lack of sources. I think discussing it on an Internet forum is acceptable? I maintain that the impulse to demand sources in such a case comes from moral offense which is then misattributed to epistemological structure offense.
CharlesW 1y ago
I can only speak to my area, but Tesla drivers north of San Diego started driving noticeably less idiotically when local dealerships started to be regularly protested.
- pfannkuchen 1y ago
  I have seen less Teslas around in general since that started. I used to regularly wait in line at the charger, and lately there has been no line. What you noticed could be a deeper correlation between driving ability or conscientiousness and who is more influenced by perceived social pressure to stop driving a type of car. Most Tesla owners also have a gas car, so it’s not as if they need to purchase a new vehicle to change their driving habits. Another explanation might be that the crazy driving was mostly from new owners before they got used to the acceleration, and with fewer new owners now the crazy driving has reduced.
  - stevenjgarner 1y ago
    > Most Tesla owners also have a gas car Really? Do you have a citation for that? Tesla has sold over 7.25 million vehicles [1]. I could believe that Tesla owners have proportionately higher ownership of a 2nd vehicle, but most of them? [1] https://backlinko.com/tesla-stats https://backlinko.com/tesla-stats
    - ninalanyon 1y ago
      It's possibly true that in the US Tesla owners have an ICE car. Definitely not true here in Norway.

hn_throwaway_99 1y ago

This is kind of buried in the article, but it annoys me when articles lead with a clickbait title and then basically admit in their own article how their clickbait title is bullshit. That is, even though the loss ratio is much higher than the industry average and indicates a loss, it has been going down for the past 3 years (116.6 in 2022, 114.7 in 2023, and 103.3 in 2024). I would expect that any startup offering would start out with a loss that then eventually turned to a profit over time. All that said, I think Tesla and the EV industry as a whole will need to do a lot to bring down their repair costs. It's insane that these cars are designed in such a way that even minor fender benders cost tens of thousands to repair. I actually think government should create liability limits for vehicles to incentivize car makers to make repairable cars. That is, if you're driving around with a Faberge egg as a hood ornament, and I ding it, I don't think I should be responsible for the outrageous repair charges - the recklessness was on your side, in my opinion, for putting such a fragile/expensive machine on public roads. Otherwise car makers have little incentive to improve the repairability of their cars.

moomin 1y ago
I think the real problem here is that many of the things that get wrecked are specifically designed to get wrecked rather than the driver.
philjohn 1y ago
It doesn't help that the official Tesla repair guide essentially says "Order a new side panel for the car, cut the damaged section from the car, weld in part of the side panel". And the side panel in this case stretches the entire length of the car.
bob1029 1y ago
> I actually think government should create liability limits for vehicles This is effectively already a thing in most US insurance markets. TDI (Texas) requires $25k minimum coverage for property damage, so in general this is what everyone is going to have. If your car is worth more than that and someone runs into you and totals it, you are ~fucked unless you have additional un[der]insured motorist coverage on your side. Suing someone for the difference is a 10/10 nightmare experience. Many people who are driving like ass also seem to have really bad financial situations. There is such a thing as being so poor that you are judgement proof. The overall effect of this is that drivers of high value (i.e., luxury) vehicles typically take it upon themselves to ensure the safety of their property. They don't make it the problem of everyone else. If their Faberge egg of a lambo gets wrecked, they understand the other parties probably aren't going to be able to replace it. Certainly, follow through with everyone's insurer and wring every policy dry, but the rest is up to the presumably wealthy luxury vehicle owner. If you are driving a luxury vehicle and cant handle the risk of an underinsured driver totaling it, you should question if you can actually afford the vehicle.

throwanem 1y ago

Oh, Tesla has its own insurance underwriter? That's normal for an automaker, right?

mschuster91 1y ago
Dealing with anything financial has been the norm for car manufacturers for many decades. Germany's Volkswagen for example has its own insurance and banking arm. The bank got established in 1949, however I couldn't find out when they expanded in insurance. Kinda makes sense - selling cars is a cut-throat business with ever tighter margins, the real money is to be made in financing/leasing, insurance and aftersales services.
- throwanem 1y ago
  I'm not saying I can't see sense in that level of integration, just that I can't think of another automaker offhand that does business in the US that way, underwriting auto insurance policies specifically through a wholly owned subsidiary. Maybe I would know differently if I'd ever bought a car new off the lot, but I'm still driving the one I bought in 2019 and back then it still made sense to look at buying new as mostly a waste of money.
  - Misdicorl 1y ago
    The story I've heard is that general motors down fall began when they stopped writing loans for other car manufacturers. They used to under write basically every car loan in the US. I've never looked into how truthful it is, but it smacks of idiotic/arrogant executive tropes so well I almost don't want to discover it's false
    - throwanem 1y ago
      Oh, I see, I wasn't clear. I meant specifically a policy underwriter, as opposed to something like GMAC of old. I've updated my original comment with the necessary adjective. Looking over GMAC's history via Wikipedia, I find they did underwrite insurance for a time and that no other US insurance company originated within an automaker. That suggests to me Tesla's operating model here is indeed about as unusual in context as I originally - well, intuited, I suppose. I think that's interesting.

fifilura 1y ago

Major Swedish newspaper Dagens Nyheter just ran a story that the insurance cost for a Tesla has almost doubled in a year. While others remained more or less stable. (Quaterly cost, full insurance) Tesla Model 3: 3 338 kronor (70,3 percent increase since Q1 2024) Tesla Model Y: 4 007 kronor (97,3 percent increase) Kia EV6: 938 kronor (-4,7 percent) Volvo EX40: 1 097 kronor (-9,8 percent) https://web.archive.org/web/20250510192608/https://www.dn.se/ekonomi/forsakringspremier-pa-tesla-stiger-kraftigt/ https://web.archive.org/web/20250510192608/https://www.dn.se... They speculate the reason is that relatively few companies insure Teslas. Maybe because they have their own insurance company, or maybe because the leasing company take on the risk. I don't know how this works exactly.

tough 1y ago
one would think the global -lets deface teslas- movement might have something to be with insurance premiums going up for teslas no?
- redox99 1y ago
  That's unlikely to be a significant percentage of insurance claims.
  - tough 1y ago
    so its more about tesla's owners being bad drivers then?
    - justanotheratom 1y ago
      one legitimate explanation I have heard is that when a Tesla gets in an accident, even with minor damage, they have to replace the Battery, because they are not able to accurately assess the damage to battery and the risk of not changing it. This balloons the insurance cost.
      - tptacek 1y ago

mrweasel 1y ago

Can someone explain Tesla to me, assume I'm an idiot. If Tesla sales are down, the Cybertruck is an unmitigated failure and now they are losing money on insurance, then why on earth is the Tesla stock not going down? Not only is the stock not going down, it's doing well, up almost 5% year-over-year.

deadbabe 1y ago
From what I gather it’s mostly propped up by people who believe Tesla will be more than just a car company but will instead expand out into some general robotics company. Which is really pretty standard for any tech company whose valuation doesn’t make sense. People are betting the future will be brighter and have more revenue from new products.
testing22321 1y ago
People buy stocks betting on their guess of what will happen in the future. Toyota = safe, predictable, steady ship Tesla = wildly profitable for many for years, but incredible unpredictable. It seems many are still guessing it’s going to go up in the future.
__MatrixMan__ 1y ago
I don't understand it either, but I think it means that more needs to be done. We must establish that tinkering with politics was a good way to scare off investors. These investors are not yet scared enough.
voidspark 1y ago
Tesla stock is extremely volatile. It dropped 56% from the high in december, and is now trading at 40% below the all time high.
- mrweasel 1y ago
  So investors shaw the stock hit 400+ and now they're betting it will do it again?
  - 1y ago

powerbroker 1y ago

I was driving the Model X a few years ago and ended up T-boning a minivan at ~45 MPH. Minivan rolled over. Our airbags deployed. Post accident, I discovered my glasses remained on my face and it seemed that the airbag did not even reach my body -- with the webbing taking the bulk of the impact. Car took months to repair and ~$30,000. Not bad when you consider we were driving to the hospital at the time, and the accident prevented us from reaching the hospital as well as preventing us from calling on an ambulance. 3 'assists' that the car gave us: 1. Crumple zone is bigger; 2. Battery made our vehicle heavier; 3. (speculatively), the 'crumple parts', crumpled more and costed more -- leading to less (none) bodily injury.

testing22321 1y ago
The Model S and Model X were the first two vehicles to get 5 star crash safety in every category from the US and the EU. Supposedly broke the testing machines (leading to Elon saying 5+ stars) They are among the safest cars on the road.
- jeroenhd 1y ago
  >Supposedly broke the testing machines That doesn't sound like a good thing at all? Then again, I'm hardly surprised that the guy who tried to build an aluminum tank and sell it as a car would claim it is.
  - Rygian 1y ago
    As the story goes, the machine that broke is a press that is supposed to crush the car roof. The car roof withstood the pressure, the press did not. It's supposed to happen the other way around.
- AtlasBarfed 1y ago
  I remember that when the release versions about 10 years came on the market, but I have not heard those claims in quite a while from any credible sources. I am certainly not authoritative. My vague recollection is that offset crashes Tesla didn't do quite as well at, so since then Tesla's ironclad safety rating has since waned

_xerces_ 1y ago

If Tesla Insurance is paying out for parts to fix damaged Teslas aren't Tesla effectively paying themselves and so recouping some of the paid out monies? Sure, it goes on a different balance sheet, but it's all Tesla in the end. On second thought maybe this loss ratio is based on buying parts at cost from the auto division and so there is still a loss there to Tesla who has to supply them from China or whereever.

analog31 1y ago
Some of the traditional insurance companies do this too, by having an ownership stake in the repair facilities, so they also buy repairs "at cost."

zombiwoof 1y ago

Hey let’s put Musk in charge of the US Government he’s such a fixer , he gets it