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Comment by yohann305 | Hacker News Reader

this makes total sense. If Tesla cars are safer than most, then the insurance price should be lower since there would be less accidents in general and Tesla owners don't have to pay for the "less safe" cars within the same insurance umbrella.

It also makes sense for Tesla to have their own insurance company if they want to someday have "insured" self driving cars and deal with the fact that in case of accidents where cars are not driven by people but by algorithms.

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Except that unfortunately all of the following can be (and I wouldn't be surprised if they are) true: (i) Tesla cars are safer than most, (ii) Tesla drivers are safer than most, (iii) Tesla accidents cost insurers more than average, more than offsetting (i) and (ii). (You could also possibly add (iv) Tesla drivers are more likely to be located in states/countries where running an insurer is more expensive).

The cost (to the insurer) of providing car insurance isn't about how "safe" a driver is, it's about a combination of (1) how likely they are to make a claim (including accidents which aren't their fault - locality plays a part here - and thefts etc), and (2) how much will the average claim costs their insurer (and repair costs factor in massively here).

I imagine having the insurance under Tesla umbrella could make repairs cheaper in certain scenarios

If Tesla did quicker & cheaper repairs on cars insured by them, would that be illegal?

It would harm competing insurance companies significantly, and mean they can effectively corner the entire insurance market for their own cars.

They get to source the parts at cost. I don't think that's illegal really. It's kind of like AppleCare, right?

It might be possible for them to argue this on the basis of a volume discount.

Does Tesla own and run all their own repair shops or do they license and certify third party shops.

I think both

There's no such thing as a catch-all "insurance umbrella." Auto insurance providers already discriminate between various makes & models. So if Teslas are actually less expensive to insure then it means every provider which is charging higher-than-average premiums is making a colossal actuarial goof.

The much simpler explanation here is the correct one: the high cost and sparse availability of parts & repair service make Teslas much more expensive to insure.

Insurance prices are spread across the entire risk pool though. Even if the entire pool is overall safer, the mean/median costs might still be higher than a larger, more diversified risk pool that can more easily subsidize low risk accounts by winning long-term bets against bigger risks.

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