National insurer AAA is raising its prices for Tesla’s Model S and Model X, citing higher-than-average claim rates and repair costs for the two cars. According to a report from Automotive News, AAA said it could raise its premiums by as much as 30 percent for the vehicles. Other large insurers including State Farm and Geico told the publication they couldn’t say whether or not they would also increase prices, but noted that data about claim frequency is always used to calculate insurance premiums.
Tesla itself disputes the move, saying the AAA has made its decision based on faulty information from the Highway Loss Data Institute. A spokesperson for Tesla told Automotive News: “This analysis is severely flawed and is not reflective of reality.”
The crux of the matter is whether or not Tesla’s cars have a higher-than-average claim rate for crashes and collisions. Usually, these averages are calculated by comparing the number of claims with similar cars. In this case, the Model S and Model X are categorized as “large luxury vehicles” — a class that also includes the BMW 5 series, Mercedes-Benz E class, Audi A6, and Volvo XC70. But, Tesla says, it’s “false and misleading” to compare the Model S and X to the likes of a Volvo station wagon, pointing out that its cars have faster acceleration rates and better passenger safety.
In general, says the Highway Loss Data Institute, luxury vehicles are more expensive to insure because they’re involved in more collisions than other cars (13 percent more) and cost more to repair (about 50 percent more). But Tesla’s vehicles stand out even among this crowd, says the HLDI, with Model X owners filing insurance claims 41 precent more than average, and with these claims costing 89 percent more than average to fix.
“Teslas get into a lot of crashes and are costly to repair afterward,” Russ Rader of the Insurance Institute for Highway Safety told Automotive News. “Consumers will pay for that when they go to insure one."