Tesla Launches Its Own Auto Insurance Service

Tesla Inc. has introduced its own low-cost insurance service for California buyers of its electric cars.

Tesla hasn’t offered details about the program, which will be expanded later to other states. But CEO Elon Musk says the company’s comprehensive coverage will be as much as 20% cheaper than rates for comparable plans from traditional insurers.

Musk asserts that Tesla can offer lower prices because its EVs have more active safety and crash-avoidance features than typical cars. He also says the service will reduce unspecified fees normally charged by traditional insurers.

Industry experts, including the Insurance Institute for Highway Safety, cite data that shows Tesla cars currently are among the most expensive to insure. They point to hefty repair costs due to the unusually high level of sensors and other high-tech hardware content in Tesla vehicles.

Tesla didn’t indicate who will provide its insurance. But Reuters says state regulatory filings indicate the carmaker has been licensed to broker products by State National Insurance Co., a unit of Markel Corp.