How Tesla’s “real-time” insurance reshapes driver habits | WARC | The Feed
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How Tesla’s “real-time” insurance reshapes driver habits
Tesla, the automaker, has found that its “real-time” insurance, which provides instant feedback to drivers on how their on-the-road habits affect insurance rates, is helping change behavior in positive ways.
Why it matters
Manufacturers of physical goods should look to Tesla’s expansion into digital products and services for guidance on how to reap greater benefits from individual products, as well as build business ethos.
- Tesla Insurance lets drivers of its Model S, Model 3, Model X and Model Y vehicles see their premiums instantly rise and fall in line with their habits.
- More specifically, this instant feedback is “actually resulting in Tesla owners driving the cars in a safer way,” Elon Musk, Tesla’s CEO, explained on an earnings call.
- “What we’re seeing is, it is causing people to drive their cars in a safer manner, which is also net good,” he added.
- Tesla is working to grant 80% of its US customers access to its insurance product by the end of 2022.
The state of play
- The company recently launched its real-time insurance product in three states; it currently stands as the second largest insurer of Teslas in Texas.
- According to chief financial officer Zachary Kirkhorn, Tesla has seen “extremely high retention for customers who experience the product.”
- Tesla foresees a future in which crash reports, insurance feedback, and physical repairs are fully streamlined, and can hasten the process of improving vehicle design so as to prevent future crashes.
The big idea
“When people see [their real-time insurance score] ... they realize: If I make the following changes in my driving habits, then I pay less in insurance. Then they have a real-time feedback loop for … safer driving and an incentive to do so.” – Elon Musk, chief executive officer, Tesla.
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