Insurance companies write off Tesla EVs even for minor damage

Recent salvage auction listings reveal that a large majority of 120 Model Y vehicles had odometer readings of less than 10,000 miles. Despite their low mileage, these electric vehicles will not be drivable due to the high costs associated with repairing them.

It was not possible to determine the types of incidents that caused the damage, but several well-known insurance brands, such as State Farm, Geico, and Progressive, concluded that the repair costs for these vehicles were too high.

In 2022, Nerdwallet published a report stating that a Tesla owner with good driving history and credit could expect to pay about $2040 annually for a Model Y, and up to $3044 for a Model X. According to the same report, the average cost to insure a Model 3 is almost 30 percent higher than the national average for car insurance.

Determining the additional cost of repairing the average Tesla compared to other electric and ICE models after an incident is challenging. Nevertheless, Tesla is aware that insurance costs for its EVs exceed the average industry costs. To reduce the costs for Tesla drivers, Tesla began offering its insurance policies for customers in 2019.

A Model 3 owner was quoted $16,000 by a Tesla service center to repair a battery pack coolant leak caused by road debris. However, an independent mechanic was able to fix the issue for $700, demonstrating the significance of the Right to Repair for electric vehicles.

As per Tesla’s executives, the company’s insurance division is aiding the automaker in reducing forthcoming repair expenses by furnishing a feedback mechanism to minimize the worldwide cost of Tesla repairs. Tesla is using its insurance segment to implement alterations in vehicle design, including minor modifications to bumper design and ensuring the availability of spare parts necessary for collision repair, which can significantly impact the cost of repairs.

Musk, the CEO, stated that the majority of accidents are typically minor, resulting in damage like a broken fender or a scratched side of the car.

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