AAA Raises Insurance Rates On Tesla Vehicles Because Repairs Are So Costly

Illustration for article titled AAA Raises Insurance Rates On Tesla Vehicles Because Repairs Are So Costly

National insurer AAA said it’s raising rates for Tesla Model S and X vehicles, due to a high frequency of claims and costly repairs, according to Automotive News. Tesla decried the move in near Trumpian-fashion as being based on an analysis that’s “not reflective of reality.”

AAA based its analysis off data from the Highway Loss Data Institute, Automotive News reports, and said premiums for some Tesla vehicles could spike as much as 30 percent. Other insurers, like State Farm and Geico, wouldn’t tell the publication if Tesla owners would see an increase in rates, but said that claims data is a significant factor in calculating a rate. Here’s more:

The Highway Loss Data Institute report covered the 2014-16 model years. Vehicles are divided into classes based on size, weight and competing models. The frequency and severity of claims are compared with overall average claims of passenger vehicles and the average claims of the vehicle’s class. In evaluating Tesla vehicles within their categories and to the overall population of vehicles, the report found the amount and cost of claims to be much higher than average.

“Teslas get into a lot of crashes and are costly to repair afterward,” said Russ Rader, spokesman for the Insurance Institute for Highway Safety, which is the Highway Loss Data Institute’s parent organization. “Consumers will pay for that when they go to insure one.”


The issue appears to boil down to how the Institute analyzed the Model S and X. The News says the S is classified as a “large luxury vehicle,” placing it among the Volvo XC70, Audi A6 and BMW 5 series. The Institute says that the Model S and X were both involved in more than 40 percent more claims than the average vehicle in their class, according to the report.

Tesla says this is bogus, and compares the S and X “to cars that are not remotely peers, including even a Volvo station wagon.” Ouch. If the vehicles were compared to similar brands, Tesla claimed its crash data wouldn’t be nearly as high.

With regards to the X, a Tesla spokesperson came across as nearly hyperbolic: “We expect Model X to receive the best score for any SUV ever tested.” Got that? Ever.

Classification quibbles aside, it probably doesn’t make insurers feel any better to see stories like this floating around online.

Senior Reporter, Jalopnik/Special Projects Desk

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Big Block I-4

The real story is that someone thought fixing a $100k, niche car would ever be cheap.