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As he did with the electric car industry, Elon Musk is aiming to revolutionize car insurance, promising drivers up to 60% off their premiums.
Tesla Insurance launched in Colorado, Oregon and Virginia this month, after bringing its services to Texas, Illinois, Arizona, Ohio and (to a limited extent) California.
The company, which hopes to expand to most other states this year and internationally in the future, says its customers are now free from being judged on their credit, age, gender or even their claims history.
While all of that sounds enticing, Tesla Insurance may not be a perfect option for everyone — if it's even an option at all.
Are you part of the club?
Right off the bat, Tesla Insurance is only available to Tesla car owners, and there are no plans to change that.
The company says the reason it offers lower rates in the first place is that it “uniquely understands its vehicles” and their “technology, safety and repair costs.”
If you don’t have a Model S, Model X, Model 3 or Model Y, you’ll have to look elsewhere to find a big discount on car insurance.
And while Musk plans to offer his in-house insurance around the globe someday, you might have a bit of a wait depending on where you live.
“The regulatory process for approval to offer insurance is extremely slow and complex, varying considerably by state,” he wrote on Twitter last year.
Why you might switch to Tesla Insurance
Electric cars typically cost more to repair or replace than their gas-guzzling counterparts, and as a luxury electric vehicle, Teslas can be pricier still.
Motortrend has studied how much it would cost each year to insure the various models available with a traditional provider. Among other factors, these averages assume the owner is a single 40-year-old man with a clean record and good credit score:
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Tesla Model 3: $2,114 - $2,351
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Tesla Model S: $3,673 - $4,143
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Tesla Model Y: $2,118 - $2,227
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Tesla Model X: $3,355 - $4,025
An average driver could save between 20% and 40% by switching, Tesla says, while some drivers could save between 30% and 60%.
The company says it can charge less because it trusts its cars’ advanced safety features — and the driving data it harvests straight from your vehicle.
"Tesla uses specific features within the vehicle to evaluate your premium based on your actual driving," Tesla says in a statement. "You will make monthly payments based on your driving behavior instead of traditional factors like credit, age, gender, claim history and driving records used by other insurance providers."
That's a big change. While plenty of other insurers offer discounts if you install a tracking device and drive safely, they typically use that data alongside your credit, claim history and other factors to decide your rates.