Tesla CEO Elon Musk said on this week's earnings call that the electric car company is close to full self-driving and a 'revolutionary' insurance product, but auto insurers don't seem worried.
Insurers' advertisements are pushing these programs heavily. It's hard to watch TV these days without seeing the Flo character in Progressive's long-running ad campaign tout its Snapshot app, the oldest such app. Allstate had actress Tina Fey touting its Drivewise app in TV spots featuring Dean Winters as the long-running Mayhem character.
"Old vehicles are still going to crash into the new vehicles," said Justin Davis, director of enterprise research at State Farm, referring to the fact that even with the new features, roads are full of vehicles that don't have them, so there will still be in accidents until usage is closer to universal.
Tesla did not respond to a request for comment, but on this past week's earnings call, the Tesla CEO said the company is continuing to push the envelope on self-driving and the nascent auto insurance business will grow in relation to autopilot technology. Full self-driving software is now tackling intersections, city streets and narrow streets, Musk said on the call.
Musk has said in the past that California drivers can pay an amount equal to 25%-50% of a lease payment for insurance. "And a lot of that insurance cost is just because the insurance companies don't have good information about the drivers and that there is no good way to provide feedback where it's a very poor feedback mechanism in terms of the insurance rates versus the actual way that the car is being driven, whereas we can do that in real time.
Over time, insurers are waiting to see how technology changes transportation before they know its impact on insurance. Products to cover ridesharing vehicles, electric bikes and other emerging transportation forms are likely, State Farm's Davis said. Kirkhorn said Tesla decided not to replicate the California product in other states, but delay going into additional states so it could put more effort into the telematics, which refers to technology that merges telecommunications and infomatics.
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