Tesla Enters American Insurance Market
The Silicon Valley disruptor already challenges insurers outside the U.S.
Tesla has entered the insurance business. The recent launch of InsureMyTesla in the U.S. pits the disruptive automaker directly against insurers, which are already concerned that autonomous vehicles threaten their business models, according to Business Insider.
InsureMyTesla offers new car replacement for the first year in the event of total loss, along with options such as 24-hour roadside assistance and rental vehicle reimbursement. Tesla teamed with Liberty Mutual Insurance to offer the coverage in the American market. The new insurance policy only covers Teslas.
Business Insider noted that autonomous driving – which Tesla is at the forefront of exploring – is expected to eventually reduce accident rates and lower insurance costs. This has caused multiple insurers - including Cincinnati Financial, Mercury General and Travelers to indicate it could threaten their business models, BI reports. In fact, a white paper from accounting and consulting firm KPMG posits that by 2040 the American auto insurance market could shrink by 60% due to autonomous vehicles.
Tension between Tesla and insurers are not restricted to America. The manufacturer already offers insurance in 20 other countries.
The Silicon Valley automaker and other autonomous vehicle developers are pushing back against British insurers which want to have access to data after an accident, The Telegraph reported. “Car insurers face a complete overhaul of their businesses when cars begin to drive themselves, with liability for accidents potentially shifting from drivers to manufacturers,” the London-based news organization noted. Mainland Europe is also adapting – the European Automobile Manufacturers' Association, based in Belgium, is grappling with how to access autonomous vehicle data. Some auto manufacturers fear that loosening data rules might make autonomous vehicles easier target for cyber attacks, The Telegraph explained.