Original Title Tesla Safety Belt Hot New Energy Vehicle Exclusive Insurance
Tesla, an electric car giant, is not satisfied with selling cars only. It has also started a sideline, selling auto insurance.
On August 28, Tesla announced on its official website that it would launch its own auto insurance product, Tesla Insurance. On September 4, Tesla CEO Musk said in social media that Tesla’s auto insurance is 20% cheaper than the general insurance, which has been launched in California and will be widely promoted.
Faced with the “troublemakers”, Zhu Junsheng, deputy director of the Insurance Research Department of the Development Research Center of the State Council, said in an interview with the International Finance Daily that there are still some problems in the domestic new energy automobile market, such as “high insurance and low compensation”. Therefore, it is necessary for the industry to introduce new energy automobile exclusive insurance separately.
Zhu Junsheng believes that compared with traditional fuel vehicles, new energy vehicles have different risk characteristics and core components. For example, the core component of pure electric vehicles is batteries, but currently no insurance company can provide insurance for batteries.
Tesla is 20% cheaper.
Tesla’s original intention of selling insurance is to solve the pain of premium.
Gabi Personal Insurance Agence, an online car insurance platform, published statistics in August 2018 that the average annual premium for Tesla Model 3 (mid-end cars priced at $40,000 to $50,000) in 150 U.S. zip coded areas is $2814, which is only $35 cheaper than insuring a classic Porsche 911 sports car in those areas. The average annual premium for Chevrolet Volt Premier, which sells on odel 3, is only $2102.
In this regard, Tesla said that it would take the lead in providing up to 20% to 30% discount for Tesla owners in California, and provide comprehensive insurance and claims management.
Existing car owners can place orders in “one minute” through Tesla official website. New car orders can request quotation before delivery after obtaining VIN vehicle identification code. Tesla Insurance supports monthly payments. Customers can cancel or change insurance policies at any time without hidden fees or additional charges.
However, Tesla also stressed that not all Tesla owners will have lower premiums than the market price, the premium depends on the driver’s driving habits. But if they want to drive crazily, the premium rate will be higher.
Pricing companies using personal consumer data will depend on driver authorization and state laws.
Matthew Edmonds, Tesla’s chief insurance officer, said at an auto insurance conference in Chicago: “The data is there, there are cameras in and around the car, and all the data points are there. But it all comes down to case law and the data we can use. Every state has its own situation.”
Industry “High Insurance and Low Compensation”
Behind Tesla’s self-insurance is the high premium and high compensation rate of new energy vehicles, as well as the “blue sea” of premium growth, which can be seen from the data of new energy vehicles in China.
According to the New Energy Automobile Insurance Market Analysis Report (hereinafter referred to as the “Report”) released by China Insurance Credit, new energy vehicles show a strong growth trend in new vehicle insurance, with the proportion of new energy vehicles increased from 0.32% in 2013 to 2.74% in 2017. According to the previous forecast of China Automobile Engineering Society, the annual sales of new energy vehicles in China will reach 15.2 million by 2030, and the number of new energy vehicles will reach 80 million. The report estimates that the premium for new energy vehicles will reach 470 billion yuan by 2030.
Nevertheless, “cheap car, expensive car insurance, difficult to settle claims” has always been a major problem for consumers.
Recently, a reporter from the International Finance Daily asked people’s insurance companies, Ping An property insurance companies, Tai Bao property insurance companies, land insurance companies, some 4S stores of automobiles and owners of new energy sources by telephone. The survey found that the insurance process and products of new energy vehicles are the same as those of fuel vehicles, but the insurance prices of new energy vehicles vary greatly.
Reporters learned from the above insurance companies, the new energy automobile insurance price is divided into two situations, namely, according to the official guidance price (before subsidies) to insure, and according to the price after subsidies to insure. However, in the first year of car purchase, consumers mostly choose to insure in 4S stores, while 4S stores mostly insure before subsidies. Similarly, if the new energy vehicle is not in danger in the first year, the insurance premium in the second year will float in a certain proportion, which is basically the same as the fuel vehicle.
Reporters in the industry learned that the insurance price of automobile insurance is directly related to the insurance interests of consumers, and therefore has attracted much attention from consumers. Taking the vehicle damage insurance as an example, if the actual cost of vehicle purchase is 200,000 yuan, the maximum amount of vehicle damage insurance is 200,000 yuan at the time of insurance. After the accident or damage of the vehicle, the insurance company will compensate according to the actual value of the vehicle purchase, that is, up to 200,000 yuan.
However, a recent case of “high-price insurance, low-cost claims” for new energy vehicles has once again aroused controversy.
A case published by Tianjin Jinnan District People’s Court Net shows that after enjoying the subsidies of 100,000 yuan for purchasing cars by the state, consumer Li Mou purchased a brand pure electric car with a price of 160,000 yuan at the actual price of 60,000 yuan. Li Mou insured the vehicle for 160,000 yuan, and the insurance amount was 160,000 yuan. During the insurance period, Li Mou drove the vehicle in a unilateral traffic accident, which caused the total loss of the vehicle. Afterwards, the insurance company only agreed to reimburse Li Mou for the actual expenditure of 60,000 yuan on car purchases at that time.
At the conclusion of the case, the undertaking officer said that from the perspective of protecting the interests of policyholders, real-time changes in national policies and compensation only at the actual purchase price may damage the interests of policyholders; from the perspective of social moral hazard, compensation according to the insurance quota, more and more people will be dishonest and will adopt intentional system. Making insurance accidents to gain additional benefits may lead to moral hazard.
Therefore, the underwriter put forward suggestions to the insurance company’s compensation department, demanding that it standardize the new energy vehicle insurance procedures, reasonably determine the insurance limit, maximize the interests of the insured, and avoid similar disputes recurring.
It is necessary to have exclusive insurance
According to the above report issued by China Insurance Credit, compared with traditional automobiles, the new energy automobile insurance has the characteristics of high premium per unit and high risk frequency. Especially for new energy vehicles, which have the closest relationship with people’s lives, the average premium is 28% higher than that of traditional cars, and the compensation rate is 5 percentage points higher.
This shows that it is difficult to manage the risks of new energy vehicles objectively and reasonably by applying the insurance clauses and rates of non-new energy vehicles, and the new energy automobile insurance market urgently needs exclusive insurance clauses and rate schemes.
According to the report, the insurance industry should promulgate exclusive insurance model clauses according to the risk characteristics of new energy vehicles, stipulate the risk of battery self-ignition, short circuit, collision loss and compensation standards, and deal with the third party and vehicle caused by the accident of battery, motor, charging equipment and other special components such as self-ignition and explosion. The liability for loss compensation for personal injury shall be stipulated, and additional risks such as loss of charging device and third party liability for pure electric vehicles shall be increased.
“Product terms serve customers. If the difference between new energy vehicle customers and fuel vehicle customers (such as battery protection) is obvious enough, then the product terms need to be customized separately.” A senior industry insider told the reporter of International Finance Daily that the terms and prices are not necessarily linked. The determinants of price are the level of risk and the margin of profit, not the use of independent clauses alone.
“New energy vehicle exclusive insurance needs to be introduced separately.” Wang Xiangnan, deputy director of the Insurance and Social Security Research Department of the Institute of Finance of the Chinese Academy of Social Sciences, in an interview with reporters from the International Finance Daily, said that a more detailed classification of risks could generally improve the efficiency of market operation. At the same time, because the insured persons of automobile insurance are seldom extremely poor, and the automobile is determined by the insured person’s self-choice rather than congenital factors, so the classification of risks will not cause the problem of social fairness and justice.
Wang Xiangnan added that the introduction of exclusive insurance for new energy vehicles alone does not mean that the premium price of new energy vehicles will be reduced. If insurers actively support the response to “climate change” and sustainable development, the price of new energy vehicles relative to traditional energy vehicles can be appropriately lowered, but this requires the unified planning of the industry.