Tesla strikes another deal that shows it's about to turn the car insurance world upside down

  • Tesla has created a customized insurance package, InsureMyTesla, that is cheaper than traditional plans because it factors in the vehicles' Autopilot safety features and maintenance costs.
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  • InsureMyTesla has been available in 20 countries, but Tesla just recently partnered with Liberty Mutual to make the plan available in the US.
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  • InsureMyTesla shows how the insurance industry is bound for disruption as cars get safer with self-driving tech.

Tesla struck a deal with Liberty Mutual to create a customized insurance package — and the move shows how the electric automaker is intent on disrupting the insurance industry.

The new plan is called InsureMyTesla and was designed specifically for Tesla vehicles. Its benefits include replacing Teslas damaged beyond repair within one year. Tesla launched the package on October 13 in the US in all 50 states, but it already exists in 20 other countries, a company representative confirmed.

Electrek first reported on the news.

Tesla started quietly rolling out the InsureMyTesla program in February in Hong Kong and Australia. The electric car maker partners with different insurance companies across the globe to offer InsureMyTesla, which lowers overall insurance costs by factoring in the vehicles' Autopilot safety features and maintenance costs.

Tesla CEO Elon Musk has said that insurance agencies should adjust their prices for Tesla vehicles because the cars come with Autopilot, the company's advanced driver-assistance feature. 

The National Highway Traffic Safety Administration found that  crash rates for Tesla vehicles have plummeted  40% since Autopilot was first installed.  Electric vehicles also generally require less maintenance then traditional, gas-powered vehicles.

"If we find that the insurance providers are not matching the insurance proportionate to the risk of the car then if we need to we will in-source it," Tesla CEO Elon Musk said in February.

Tesla's partnership with Liberty Mutual marks the first time the InsureMyTesla package has been available in the US. The US launch comes a few months after AAA said it would raise rates for Tesla owners after seeing a high frequency of claims among Model S and Model X owners.

AAA based its decision based on data provided by the Highway Loss Data Institute, an analysis that a Tesla spokesperson said was "severely flawed" at the time.

The deal with Liberty Mutual shows how US agencies are starting to realize that they must adjust their prices as cars get safer with advents in self-driving tech. 

Insurers like Cincinnati Financial, Mercury General, and Travelers have noted in SEC filings that driverless cars could threaten their business models, according to a 2015 Bank of America and Merrill Lynch report.

The personal auto insurance sector could shrink to 40% of its current size within 25 years as cars become safer with autonomous tech, according to a report by the global accounting firm KPMG.

Tesla hopes to one day bundle the price of insurance and maintenance into the price of future vehicles.

"It takes into account not only the Autopilot safety features but also the maintenance cost of the car," Jon McNeill, Tesla's vice president of sales and services, has said of InsureMyTesla. "It’s our vision in the future we could offer a single price for the car, maintenance, and insurance."

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My grandfather's primary transportation was a mule and a wagon.  My grandchildren won't know what a mule fart smells like or how far away town really is.  

My grandfather didn't worry about mule insurance.  Most folks in those days never heard of insurance and if they did, they didn't have any money to buy it.  Insurance was for people who had money.  

My grandfather retired his mule and bought a truck in the 1950's.  The truck was faster and hauled more, but it didn't have "Jack's" personality.  The old horn on the Chevy was loud, not unlike old Jack's bray.

My grandfather passed away in 1986.  He was 88 years old and he loved to talk about his mules.  He never mentioned anything about the trucks and cars he had owned.

Maybe one day I'll be able to tell my grandchildren how good it felt to drive fast and feel the tires break loose in a curve.  They'll say, oh grandpa, cars can't do that, the computer won't let them.  Just look at all the auto insurance companies that are not around anymore, no accidents, no need for insurance.  People shouldn't drive cars, it's too dangerous. 

LOL!  Entertaining story, Max.  Did your grandfather ever use the expression; "grin like a jackass eating briars"?

Oh yes, and I've often wondered if the jackass liked the briars or just thought it would look funny. 

My dad used to say that whenever we were having a photo taken.  He had a corny sense of humor but then again he was born in 1902.  Turns out mules do eat briars.  Long story short we went to a friend's elderly father's house way out in the country after a squirrel hunt one morning.  He still tilled his garden with a mule.  Dad called me over to the pasture fence and said look at that mule.  The mule had several briars stuck to its lips and cheek.  The animal was making very exaggerated facial contortions trying to dislodge those briars.  And then I knew what my corny father's saying was all about.  LOL!  Now when I use that expression my younger family members look at me like I'm nuts.  I'm sure they just laugh it off as something that old folks say.

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