TeslaMondo talks to car buyers every day. Their car insurance falls into one of these two arrangements, and both of them create a not-so-fresh feeling.
CAMP ONE — big, abstract entities with no local agent. GEICO, Lib Mutual, Progressive, etc. When customers sign on with these companies, they know where their money is going. This doesn’t necessarily mean it’s a lovely relationship. But at least these customers know who handles their car insurance.
CAMP TWO — local agent. This is where things get dicey. Believe it or not, many customers can’t remember who their insurance agent is. They probably know the brand of insurance, such as Safety Insurance or Commerce, but not the local middleman who sells it to them. “The money goes somewhere,” they say. Then they whip out their cell phones and try to look it up, or they call someone at home to find out. Oftentimes, even their go-to source has the name totally wrong because the agency was bought out years ago by another agency. In short, the middleman offers no value. Even if you’re in an accident and call your agent, you’re immediately instructed to call the parent company. True?
People are migrating from camp 2 to camp 1, the lesser of the two evils. If the rates are even slightly better there, then goodbye local agent, whoever you are. Might as well send the money to a lizard, or that other creature.
So your choices are either a phantom middleman who does nothing but pick your pocket, or a big, cold machine that picks your pocket a little less but poisons your world with gag-worthy marketing. Neither camp sounds terrific? Tesla may have a compelling alternative, assuming it takes its overseas insurance offerings to the USA:
CAMP THREE — Automaker insurance. The advent of autonomy is going to hurt the car insurance industry as car ownership declines and accidents become scarcer. Premiums should, in theory, fall dramatically, but of course they won’t — unless they’re FORCED to fall dramatically by disruptive intervention. If Tesla’s proprietary rates are cheaper than camp one, with comparable coverage, and with at least some semblance of personal relationship, why would anyone go another direction? Risk of a Tesla bankruptcy, maybe. Who underwrites Tesla insurance? There’s a question worth asking.
Another question worth asking is how much crack the press can possibly smoke before someone drags them away from their keyboards. First, Mashable writes a dubious click-me headline (Tesla insurance isn’t available in the US). Then EconoTimes links to the Mashable article but ups the ante by equating “insurance for life” with “life insurance.” Oy gevalt!