Tesla has brought on board a seasoned executive from GEICO, aiming to reduce insurance costs for its electric vehicles (EVs).
The automaker has long sought to address the relatively high insurance costs associated with owning its vehicles, despite successfully lowering the cost of the vehicles themselves over the past five years. Other expenses such as interest payments and insurance have remained significant, prompting Tesla to explore ways to lower these costs to boost demand.
Initially, Tesla collaborated with established insurance companies to offer insurance products. In 2019, Tesla introduced its own insurance product in California but did not integrate real-time driving data or Tesla’s safety score as originally intended.
Before expanding the insurance product to other markets, Tesla sought to enhance its safety score system, which uses real-time driving data from Tesla vehicles to assess driver behavior based on factors like Forward Collision Warnings, hard braking instances, aggressive turning, unsafe following distance, and forced Autopilot disengagements.
In October 2021, Tesla launched its new insurance product in Texas, based on the safety score, and has since expanded it to several states. However, the product has faced criticism due to its pricing being tied to real-time data, which may not align with the enjoyable driving experience offered by Tesla vehicles, making it less appealing to some customers.
The new hire, Laben, most recently served as the ‘Director of Claims Specialty Operations’ at GEICO, bringing a wealth of experience to Tesla. Laben confirmed his new role as ‘Head of Insurance Partnerships’ at Tesla, emphasizing his goal to make Tesla vehicles more affordable to insure.
“My goal is to make Tesla vehicles easy and economical to insure. By partnering with insurance companies, teams across Tesla, and collision shops in the USA and Canada, we’ll lower the total cost of Tesla ownership and accelerate the world’s transition to sustainable energy,” Laben stated on LinkedIn.
It appears that Tesla will continue to collaborate with other insurance companies in the foreseeable future rather than relying solely on its own insurance products.
