High collision repair costs make insuring electric vehicles more expensive, translating to higher premiums. When Tesla saw how this was impacting sales, it launched its own auto insurance business with the promise of offering better and cheaper services.
Elon Musk has touted Tesla Insurance as a “vastly better” experience for customers, promising immediate repairs in the event of an accident.
But a recent report by Reuters has uncovered a major disconnect between Musk’s words and the experience that customers are having with Tesla’s foray into insurance.
Mark Bova is one of several customers featured in the Reuters report. He shared his experience after a car accident, recounting how he had to wait seven months for payment on his totaled vehicle and is still awaiting compensation for around $50,000 in medical expenses.
Another customer recalled how he had to make about 15 phone calls before being able to talk to someone at Tesla Insurance.
Similar complaints have flooded social media, online forums, and consumer advocacy platforms, according to Reuters, with customers echoing grievances about prolonged waits for claims, repairs, and the inability to establish contact with claims adjusters.
Sources familiar with Tesla Insurance’s operations told Reuters about challenges related to understaffing. They said adjusters often had to deal with hundreds of claims each while also answering phone calls.
Reuters said Tesla did not divulge the number of claims adjusters working at its insurance arm. But sources did reveal that only a dozen or so adjusters had been handling claims in California in 2021.
Tesla has reportedly expanded its insurance operations into 11 more states. It has also hired more claims adjusters in Texas and Maryland, Reuters said, citing LinkedIn profiles and job listings.
Still, customer complaints have persisted, and even state regulators have begun to take notice. In at least two occasions this year, the Ohio Department of Insurance has found that Tesla violated regulations related to the handling of claims, according to Reuters.
Outside of Tesla, insurance industry experts have been discussing ways to stall the increase of premiums for electric vehicles.
Earlier this year, insurers argued that many EV battery packs cannot be assessed or repaired after accidents, which forces them to write off even low-mileage cars. They warned that unless car manufacturers produce more easily repairable battery packs and provide third-party access to battery cell data, premiums for EVs will continue to increase.
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