Tesla Rolls out Usage-Based Car Insurance Program in Texas

I recently mentioned how Tesla’s Self-Driving Beta rollout was for drivers with “perfect” safety scores. Turns out the safety grades were for something far more insidious than autonomous vehicles – car insurance.

Yep, Tesla is moving into a space dominated by talking geckos, J.K. Simmons, Flo, and Aaron Rodgers…in Texas.

The automaker has introduced a unique car insurance program to the Lone Star State, dispensing with traditional factors like age, credit, gender, and driving history for Tesla’s proprietary “safety scores.”

On paper, this seems like the most fair way to calculate insurance premiums, relying entirely on real-time driving behaviors vs. subjective factors. But the history of usage-based insurance discounts with more traditional providers paints a less rosy picture.

Most car insurance providers offer some sort of usage-based discounts, with the most famous (and quotable) being State Farm’s “Drive Safe and Save,” which apparently offers savings up to 30%.

According to Time’s NextAdvisor, usage-based discounts rely on auto-telematics, which uses cellular and GPS functions, plus onboard diagnostics to monitor certain factors. In the case of State Farm, those factors include acceleration, braking, cornering, phone usage, speed, and even time of day (driving late at night or in traffic increases the risk of accidents and thereby docks safety points).

So you’re probably already guessing that usage-based discounts can be slightly infuriating, even if you’ve never used one.

Anecdotally, my wife uses the “Drive Safe and Save” program, and I can tell you from personal experience (when I was behind the wheel of her car) that it doesn’t just expect “safe” driving. It wants absolutely perfect, impeccable driving, with factors – like time of day – that are mostly out of your control.

If Tesla’s program is anything like existing usage-based discounts, it may not be the consumer-friendly miracle some are expecting.

Tesla drivers’ safety scores start at 90 by default, and their insurance rates are based on subsequent driving behaviors. Owners can apply now.