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.
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.”
FSD Beta 10.2 rolled out Friday midnight to ~1000 owners with a full 100/100 protection score. The rollout will go on for several days after that, to see how it goes. If it looks good, the beta will slowly start reaching a score of 99 and below.October 7, 2021
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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. ”
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.
There are definitely more improvements coming to the (early beta) security test scores. This will be continuously refined until it is a very good predictor of accident probability. Exciting actuarial problem!October 7, 2021
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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