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Comment by jcampbell1 | Hacker News Reader

There is a huge incentive misalignment. The customer pays monthly for “insurance” and the moral hazard, the insurance company then pays a repair company, who then pays the OEM for the headlight.

The games all go away when the manufacturer sells the insurance, estimates how safe the driver is with data, and then handles the repairs.

Tesla understands this and sees it as a way to beat the competition on total operating cost for the customer.

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I don't understand why more people don't check insurance rates before buying a car.

Insurance rates will eventually be reflected in the way the market prices the car. It would be more efficient if people checked, but the current process is close enough.

Because the difference from model to model is a) not that high when cross-shopping models of the same form factor b) outweighed by demographic correlation factors.

People do cross shop different classes of vehicle, but even within a particular vehicle class, the differences can be easily be more than enough to be an important factor in purchasing. If you're comparing two vehicles, and one is $1000 cheaper to purchase, but costs 20% more on insurance... it likely isn't cheaper by the time your loan is paid off.

Tesla wants more to insure my Model 3 than USAA does, and that’s with lower coverage limits. Perfect safety score.

That’s without getting into how much better USAA’s service is compared to Tesla.

And if you have other non-Tesla cars you probably will benefit from having them on the same policy.

Must I explain why people who serve in the US military are much better drivers on average? I’m going to go out on a limb and guess in addition to your perfect driving score, your Tesla is clean as well. I bet you probably agree with a statement like “there is no such thing as an accident”.

Enjoy your cheap car insurance. :)

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