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Own a Tesla? Better Get High-Performance Insurance

December 26, 2016

The hand-wringing over Tesla’s self-driving technology might be mostly misplaced. It’s not the autonomous driving features we should be worried about. It’s the fact that most Tesla owners just aren’t accustomed to driving – and controlling – a car that can go from zero to 60 in under 3 seconds.

CCIG President and COO T. Scott Kennedy

Even the soon-to-be-available $35,000 base Model 3 will be able to go from zero to 60 mph in less than 6 seconds, still faster than a lot of other cars.

The problem with that? Tesla owners tend to drive aggressively, exceeding their driving abilities and, in the process, crashing. A lot.

Exact figures aren’t available but Teslas, according to insurance carriers, are involved in an above-average number of single-car accidents. That’s a pretty clear indication that their drivers, typically new to the high-performance-vehicle market, are gunning it.

The frequency of Tesla-involved collisions isn’t the only problem. There’s also an issue with the severity, or extent, of damage sustained by the vehicles.

The average cost of repairs also is higher than what insurance adjusters see in, say, a Mercedes or BMW.

In part, that’s because the parts on the highest-end Teslas cost more. It’s also because there are a limited number of Tesla-certified repair shops – numbers that aren’t expected to grow dramatically any time soon because obtaining Tesla’s stamp of approval can be pricey for a shop owner.

Link: Find an approved Tesla body shop.

The problem is especially pronounced in earlier models of the Tesla, which were built with design in mind first and practicality second.

Perhaps not surprisingly, the cost of insuring a Tesla has not kept up with claims. Auto premiums have been rising in general over the past year or so, and Tesla owners should expect to see steadily higher premiums over the next few years.

So, what’s a Tesla owner or soon-to-be-owner to do?

First, understand that repair times may be much longer than what you’d expect, in part because Tesla parts are not readily available and take some time to deliver. There’s also the problem of too few authorized repair shops. And then there’s the question of your insurance company. It might be the right carrier if you’re needing coverage on an SUV, but not if you’re wanting to cover a high-performance vehicle.

The best carriers will charge you higher premiums but, in exchange, you’ll be dealing with a company that won’t balk at the higher costs of a Tesla repair.

Among other plusses, these carriers will pay for original equipment manufacturer parts, not generic after-market parts.

Better still, a specialty carrier will assign a collision-repair expert to help manage your claim, to ensure your vehicle is being repaired properly.

This isn’t a claims adjuster; it’s someone with the training and sophistication to monitor repairs – in person – and ensure that even a Tesla-certified shop is doing things correctly.

So, what about the self-driving features of a Tesla?

It’s important to realize that most accidents are caused by human error, so if that can be minimized by taking control of the moving vehicle away from the driver, the accident rate should tumble – assuming drivers actually hand off control to the vehicle’s technology.

T. Scott Kennedy, president and COO of CCIG, has more than 30 years of insurance and risk management experience.

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