They already make their own gizmos, might as well sell the insurance too.
Tesla CEO Elon Musk confirmed on Wednesday that Tesla is planning to offer product insurance to its customers, most likely “in about a month.” Although the CEO didn’t say anything much about the supposed plan, he did say that it “will be much more compelling than anything else out there.”
Analysts are thinking that the new plan will be something to place value on one of Tesla’s most popular features, the Autopilot system. It’s an advanced driver assistant system that allows users to set their car on automatic, thus removing most of the efforts and hassle associated with driving. An article from TechCrunch calls the innovation “one of the most robust and at times, most controversial, in the industry.”
Musk also said that Tesla has already talked with various insurance companies regarding this new plan, which does seem to have a lot to do with Autopilot. The information shared between the companies is supposedly meant to help lessen costs for those who will avail insurance. Some companies like Root, an insurance startup from Ohio, gives discounts to Tesla owners with Autopilot equipped.
The CEO said, “As we launch our own insurance product next month, we will certainly incorporate that information into the insurance rates.”
According to Musk, Tesla has an “information arbitrage opportunity.” He says that the company can actually capture driving data from consumers, which allows Tesla to determine the risk profile of both the driver and the car. Customers who would like to buy insurance from Tesla may have to sign an agreement saying that they will not drive the car “in a crazy way,” or else they’ll be charged a higher insurance rate.
