Tesla launches its own insurance, claims Autopilot will allow for cheaper rates

The insurance is only available in California for now.

August 28, 2019, 6:06 PM

Automaker Tesla announced the launch of its own insurance service on Wednesday, according to a blog post on the company's site.

Tesla claimed its new offering will provide customers with 20% to 30% lower insurance rates. The automaker said safety features within its vehicles, including its Autopilot driver assistance technology, will contribute to the company being able to offer the lower insurance costs.

"Because Tesla knows its vehicles best, Tesla Insurance is able to leverage the advanced technology, safety, and serviceability of our cars to provide insurance at a lower cost," the company said in the post.

For now, the insurance is only available to Tesla customers in California and covers the Model S, Model X, Model 3 and Roadster vehicles.

PHOTO: Joe Young, media relations associate for the Insurance Institute for Highway Safety (IIHS), drives a 2018 Tesla Model 3 at the IIHS-HLDI Vehicle Research Center in Ruckersville, Virginia, July 22, 2019.
Joe Young, media relations associate for the Insurance Institute for Highway Safety (IIHS), drives a 2018 Tesla Model 3 at the IIHS-HLDI Vehicle Research Center in Ruckersville, Virginia, July 22, 2019.
Amanda Voisard/Reuters, FILE

The company is offering price quotes on its site, but said it will not track drivers to set rates.

In the FAQ section on its site, the company said it does not "use nor record vehicle data, such as GPS or vehicle camera footage, when pricing insurance."

Tesla Insurance does not cover vehicles when used for ride-share services. Additionally, Tesla Insurance is not mandatory for Tesla customers, the company states.

The insurance offering comes at the same time as an outstanding lawsuit over the company's driver-assistance technology.

Tesla's Autopilot feature is currently at the center of a wrongful death lawsuit in Florida. Jeremy Banner died when his Tesla Model S crashed into a semitrailer in Palm Beach, Florida, in March. Banner's family is suing the automaker, alleging that its Autopilot and other safety features are "defective."

The purpose of the lawsuit is to "open people's eyes and make them realize that these products are defective," said the family's attorney, Lake H. Lytal III, during a press conference.

In response, Tesla said that it had data supporting the safety of its Autopilot technology.

"Tesla drivers have logged more than one billion miles with Autopilot engaged, and our data shows that, when used properly by an attentive driver who is prepared to take control at all times, drivers supported by Autopilot are safer than those operating without assistance. For the past three quarters we have released quarterly safety data directly from our vehicles which demonstrates that," the company asserted in a statement from May 2019.

ABC News' Soo Youn contributed to this report.

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