In light of consistent higher claims and exorbitant repair cost, American Automobile Association (AAA) is raising insurance premiums on Tesla cars by 30%. The Palo Alto based company is not very content with the decision and attributes Tesla higher insurance premiums to false categorization of their vehicles by AAA.
AAA collected and correlated data from HLDI (Highway Loss Data Institute), who specialize in collecting data on vehicle insurance claims, and found that Tesla owners claim more than industry average and Tesla cars cost more to repair. This essentially makes insuring Tesla a double dragger for insuring companies.
The Tesla Model X crossover SUV is categorized as a large luxury SUV with claims 41% higher than segment’s average. Moreover, the Model X costs 89% more to repair than the segment’s average. Similarly, Tesla’s luxury sedan, the Model S is categorized as a large luxury vehicle and costs more than double the segment’s average, which is 50%. The insurance claim rate of Tesla Model S is 46% more than segment’s average, which basically explains the strict stand taken by AAA toward Teslas.
Tesla on the other hand defends its lineup by accusing wrong categorization of its vehicles due to their higher acceleration. The company maintains that their vehicles are the safest options currently available in the market and their Auto Pilot feature further extends their claim and leads over their peers. They further continued that the Model X will soon receive highly favorable safety rating, which will be industry leading.
UAE citizens need not to worry about Tesla higher insurance premiums at this point in time, as Tesla is just entering in the UAE market. With support from the UAE government, we expect favorable insurance plans, but it’s wise to get yourself prepared for unforeseen circumstances.