Tesla’s driver safety scoring system could be a game-changer for car insurance

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Tesla CEO Elon Musk Claimed That the automaker’s driver safety testing system will be “continuously refined until it is a very good predictor of accident probability”—which could be a game-changer for the car insurance industry.

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Currently, the system assigns Tesla drivers a score between 0-100 indicating how safely they operate their car over a given period of time, a statistic that is used to determine whether Whether a driver is eligible for certain software updates.

For example, a recent major software update to Tesla’s Full Self-Driving Mode (FSD) – a system that allows the vehicle to maneuver around other objects and on highway ramps without requiring driver intervention – was distributed to only about 1,000 Tesla owners. With a perfect 100/100 safety score.”

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Musk also suggested that “definitely” things were coming to the company’s security scoring system — which is still in its early beta stage — in response to a tweet asking if it was “the same”. Will happen […] The system used for Tesla insurance. ”

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In its current state, the system uses five metrics, called safety factors, to calculate the likelihood that a Tesla owner’s driving could result in a future collision. According to the company, most drivers are expected to have a safety score of 80 or higher.

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Tesla currently only offers insurance packages to vehicle owners in California, although it has plans to extend service For Texas in October and then “ambitiously” for “most of America” ​​by the end of 2021.

Right now, the automaker claims its rates are “up to 30% cheaper” than the competition, though Musk’s comments suggest that its fledgling safety scoring system could play a major role in determining when the service rolls out. But what can its customers expect to pay? Collectively – presumably, the better a driver’s safety score, the cheaper their insurance.

a better system?

Of course, this is not a completely new system. For years, insurance companies have employed so-called ‘black box’ systems as a means of monitoring the behavior of drivers – a method often used to promote the safety of young drivers.

But Musk is suggesting that his company’s built-in safety scoring system – as noted, is currently being used as a measure of updated eligibility – will be “black” as Tesla’s insurance division grows. Can double as a ‘box’ system.

If so, the move could encourage the implementation of similar systems in vehicles produced by rival automakers in an effort to eliminate the need for insurance companies altogether.

If a carmaker can offer its customers accurate insurance premiums based on the safety of their driving behavior – or “probability of an accident”, as Musk puts it – why would those customers shop elsewhere for similar cover?

This, of course, is only speculative at this point – but Musk’s comments nonetheless point to a simpler, hassle-free and better future for car insurance.

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