Did you know that Tesla offers auto insurance to its owners? And that it offers solar panel shingles for your roof? And that it sells electricity to people in Texas?
Money expert Clark Howard recently fielded a question about some of those added services on his podcast. What does he think of the merits of each of those services?
Should I Purchase a Tesla Auto Insurance Policy?
Should I get my auto insurance from Tesla rather than from a traditional car insurance provider?
That’s what a listener recently asked Clark.
Asked James in Texas: "As a proud owner of a new Tesla Model Y, I was surprised by a couple of offers from Tesla after I made my purchase.
"Tesla offers car insurance at what seemed to be a competitive price. Since Tesla cars have high safety ratings I would expect that the insurance premiums would eventually be lower?
"Another offer in the state of Texas is Tesla Electric. Tesla offers home electric service for about 14 cents/kWh and for an extra $25/month there is unlimited charging 10 p.m. to 6 a.m. I'd like to hear your thoughts on these two offers."
There isn’t much information available on Tesla’s auto insurance in terms of consumer ratings, customer service or handling claims. The company announced it would begin offering car insurance in 2019.
Tesla says that it offers “a competitively priced insurance product.” And that makes sense, Clark says.
“Auto insurance is a bigger and bigger market for Tesla. Because a lot of auto insurers have not known how to price insurance for Tesla vehicles,” Clark says.
“And when they don’t know, when the actuaries can’t figure it out, they err on th side of higher rates. So Tesla has been able to come in and offer, in many states where they’re licensed to sell, auto insurance at a much lower price than you may find from traditional auto insurers.”
What States Offer Tesla Auto Insurance?
Tesla currently sells auto insurance in 11 states. On its website, Tesla promises "additional states coming in the future." Here are the states that allow Tesla to sell car insurance:
- Arizona
- California
- Colorado
- Illinois
- Maryland
- Minnesota
- Nevada
- Ohio
- Oregon
- Texas
- Utah
- Virginia
Tesla offers insurance policies to Model S, Model 3, Model X and Model Y owners.
In 10 of the 11 states (excluding California), Tesla insurance uses real-time driving behavior analysis to potentially give you a discount. But you don't need to add an extra device. Tesla's built-in software is able to evaluate your driving behavior and adjust your premiums.
In California, you can add non-Tesla vehicles to your Tesla auto insurance policy.
Should I Test Out Tesla Electricity in Texas?
If you live in Texas, you’re in an open energy market.
Tesla is one option to provide your electricity. Feel free to give them a try, Clark says, classifying the service as “an experimental thing” on Tesla’s part.
“If Tesla does a terrible job as your electricity provider, just fire them and get somebody else for electricity at a later date,” Clark says.
Ultimately, he predicted, Tesla will tie its electricity offering into buying a solar roof from them. Tesla offers “solar shingles” where the actual shingles double as solar panels. So you don’t have any panels attached to your roof.
“I’ve seen them in person a couple of times,” Clark says. “And they are expensive but look really neat.
“It ties in where Tesla’s trying to own you so many different ways with the free charging as well. And that’s the pitch to Tesla owners.”
Final Thoughts
Is Tesla a tech company or a car company? It’s a debate that is already a decade old. Stockholders and fans use the argument to justify its P/E ratio (price to earnings ratio), which is more in line with the major tech companies.
At any rate, the core of an electric vehicle remains its battery and charging station network. That’s where Tesla has held an advantage to date in the United States.
Tesla probably will continue to look for logical ways to offer more products and get more business from its owners. But if you buy a Tesla and you live in an eligible state, you’ll probably get a good price buying auto insurance from Tesla.
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