Tesla is further strengthening its presence in Texas after the construction of Gigafactory Austin and the CEO Elon Musk relocating to the state. The Texas State Insurance Department has approved a revised policy in late January, submitted by Redpoint County Mutual Insurance Co. on behalf of Tesla (reported by the Insurance Journal).
Tesla Insurance is currently only offered in California, the home to the automaker’s HQ. Tesla Insurance website mentions the possible future expansion to other U.S. states, and Texas seems to be the first one after Cali.
Redpoint specializes in private passenger auto coverage written through independent managing general agencies. According to documents filed with the Texas Department of Insurance, Tesla’s insurance program, underwritten by Redpoint, will be distributed through the Tesla Insurance Services of Texas Inc. (Tesla), an MGA formerly known as Samson General Agency.Source: The Insurance Journal
Tesla first introduced its own insurance program back in August 2019 to offer its customers competitive rates. The silicon valley-based automaker aimed at reducing the insurance costs from 20 – 30% compared to the market rates, however initial quotes received by Tesla owners at the time did not reflect that much lower cost.
But just recently, a Tesla Model Y owner received a great payout for a total loss claim for his fully loaded Model Y Performance. Tesla reimbursed him $79,401.37, which would be very close to his actual purchase cost of the vehicle (see the settlement breakdown in the following screenshot).
During the last year’s Q3 Earnings Call, Tesla CEO Elon Musk said that the current form of Tesla Insurance can be quoted as version 0.9. Tesla CFO Zachary Kirkhorn said that the automaker is working on V2.0 of its insurance program, “Obviously, insurance is substantial. So insurance could very well be 30%, 40% of the value of the car business, frankly. And as we’ve talked about before, with a much better feedback group, instead of being statistical, it can be specific,” he further explained.
During the Q4 2020 Earnings Call, Elon Musk said that Gigafactory Texas will most probably be able to start Cybertruck production towards the end of this year and volume production should begin next year. This also should be the expected timeline for the Tesla Insurance program to start in Texas, IMO.