New Tesla Insurance Launches in Texas Using Safety Score to Determine Rates

The new Tesla insurance launches in Texas using a "Safety Score" to set rates based on driving behavior. Points are docked for riskier driving maneuvers like hard-braking incidents, taking fast turns, and forced disengagement of the "auto-pilot mode." Tesla's new car insurance product is only available in Texas right now.

Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Nov 11, 2021

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Things to Remember

  • Tesla’s new insurance product offered in Texas evaluates driving behavior to offer rates
  • The Tesla Insurance “Safety Score” is based on risky driving behavior like hard braking
  • Tesla CEO Elon Musk says the new Tesla insurance is “the right way to do it”

Tesla Motors expanded its auto insurance wing this month, announcing that it would offer insurance to Texas drivers in addition to Californians, although the Texas insurance is different than the insurance available in California.

The move comes at a time when some insurance companies are under criticism from Tesla, often issuing high insurance rates for Teslas despite the vehicles’ high-tech safety features.

Tesla Touts Its Insurance as the “Right Way to Do It”

The new Tesla insurance program calculates the driver’s rate based on their real-life driving history and it doesn’t use factors of age, gender, or accident history to calculate rates.

Under Tesla’s “Safety Score,” a system will judge a driver’s skills behind the wheel — by evaluating the number and severity of risks they take. Some instances that could lower a score are hard-braking incidents, unsafe following distances, and forced disengagements with the Tesla Autopilot feature.

As reported in Business Insider, Tesla CEO Elon Musk said the new system assigns auto insurance rates based on a driver’s “actual driving history” and adds that this is the “right way to do it.”

Related: Tesla Auto Insurance Review (2021)

New Tesla Insurance Detailed

With the new Tesla insurance system, drivers automatically start at a “90” Safety Score. The system then determines their daily “Safety Score” dependent on the number of risky maneuvers that the driver has performed that day.

Overall, a driver’s Safety Score is based on five factors:

  1. Forward collision warnings
  2. Hard braking
  3. Aggressive turning
  4. Unsafe following
  5. Forced Autopilot disengagement

To determine a driver’s insurance rate, Tesla uses scores in those five categories to determine how many accidents a driver would likely get into if they drove 1 million miles.

The car manufacturer and insurance provider notes on its website that “miles driven” and “hours you drive” do not factor into the Safety Score:

“Your daily Safety Score is not impacted by the number of miles or hours you drive. We combine your daily Safety Scores (up to 30 days) into a mileage-weighted average to calculate the aggregated Safety Score.”

Some tips for improving a driver’s safety include braking slowly, slowing down before making turns, and following at a safe distance.

Tesla Has Plans to Expand Insurance Program

The new Tesla auto insurance is a culmination of effort publicized in the summer of 2020 when Musk said (as quoted in Futurism) that Tesla is “building” what he referred to as a “major insurance company.”

Musk added, “Ultimately, where we want to get to with Tesla Insurance is to be able to use the data that’s captured in the car, in the driving profile of the person in the car, to be able to assess correlations and probabilities of crash and be able then to assess a premium on a monthly basis for that customer.”

Although Musk has said that the state-by-state regulations make expanding difficult, the eventual Tesla plan is to offer insurance in more states.

Read More: Best Auto Insurance Companies That Insure Teslas (2021)