In February, Mark Bova made a purchase of a used 2018 Tesla Model S and also bought insurance from Tesla itself. However, just 16 days later, while using the Autopilot feature, Bova’s car crashed and flipped, causing him to suffer back injuries. Bova has since been battling with Tesla Insurance for compensation and payment for medical expenses, but has faced challenges in reaching the insurer and has yet to receive proper resolution. Bova’s experience is not unique, as other customers have also complained about delays in payouts, repairs, and difficulties in contacting claims adjusters.
Tesla Insurance was launched in 2019 with the promise of offering better service than its competitors. However, the insurer has faced challenges in managing the business effectively, with a limited number of adjusters overwhelmed by a high volume of claims. This has led to delays in resolving cases and providing timely communication to policyholders. The insurer’s problems are part of a larger pattern of rushed and sloppy management across Elon Musk’s various companies, including Tesla, SpaceX, X, and Neuralink.
Complaints against Tesla Insurance have caught the attention of state regulators and the plaintiffs’ bar. The Ohio Department of Insurance has found that Tesla violated state regulations in handling claims and is considering opening formal investigations. However, the exact number of complaints against Tesla Insurance and its record compared to competitors remains unknown, as some states consider complaint details confidential.
Customers who have interacted with Tesla Insurance have described their experiences as frustrating, with difficulties in reaching customer service representatives and facing long wait times for service. The insurer has expanded into additional states and hired more claims adjusters, but accounts of delayed compensation and repairs continue to surface.
These accounts contrast with Elon Musk’s promises of a better customer experience through Tesla Insurance, with immediate repairs and no arguments. Musk had criticized the typical auto insurance experience as a “nightmare.” However, Tesla Insurance has faced challenges in addressing high repair and insurance costs, which have deterred potential customers from purchasing Tesla vehicles. The insurer was launched to provide more affordable insurance options for Tesla owners, but the cost issue persisted.
In April 2019, Tesla announced the launch of its own insurance business, aiming to provide reduced rates and expand to other states. The insurer partnered with Markel Group’s State National Insurance Company to enter the California market. State National has had a high number of consumer complaints, but it is unclear how many of these involve Tesla policyholders.
Despite Elon Musk’s optimistic outlook for Tesla Insurance, the insurer has faced difficulties in delivering on its promises. The challenges faced by Tesla Insurance are part of a broader pattern of management issues across Elon Musk’s companies, which have raised concerns among regulators and the public.