Cybertruck owner reports GEICO will no longer insure them

[fredtal]

That’s too bad, but frankly I’m more worried that State Farm is going to drop my house insurance.

[fuzzyfungus]

Does anyone know if there are regulations around what auto insurance must cover/how much it can cost/how the cost must be calculated; or if it’s just not worth a consumer insurer’s time to do much policy customization?

I ask because it seems a bit odd, in theory, for an insurer to outright refuse to touch something; rather than just jacking the premiums into “the risk of failure is essentially 1, so there’s no risk pooling and you are basically paying us to run a savings account for the inevitable replacement” territory; but being perfectly happy to get paid to run a savings account.

[Otherbrother]

Per The Autopian Geico will continue to insure these trucks nationwide, so I guess that’s that:

GEICO Says It Will Renew Tesla Cybertruck Policies Nationwide - The Autopian

On background, GEICO did tell The Autopian that “Because of its gross weight and potential challenges with parts availability for repair shops, some customers may have received notices stating that PPA insurance would not be renewed for this vehicle. However, policies for this vehicle have always been available through our commercial insurance division, and now remain available via PPA as well.”

This seems to give some credence to the theory that people did indeed get nonrenewal notices and that, in some places, differences in state laws led to owners being informed that they should switch to commercial vehicle insurance. That last bit of “now remain available via PPA as well” seems to be an indication that GEICO has decided it’s better to insure the Cybertruck than it is to raise a fuss.

[anon29537550]

Only one I’ve seen IRL here in the valley likewise was wrapped in a business ad. I guess that makes it a deductible business expense, maybe?

[mmascari]

@fuzzyfungus

Does anyone know if there are regulations around what auto insurance must cover/how much it can cost/how the cost must be calculated;

Every state has an insurance commission and there is significant regulation. Insurance companies must file and receive approval for exactly how they will rate a policy and determine a price.

@fuzzyfungus

or if it’s just not worth a consumer insurer’s time to do much policy customization?

I ask because it seems a bit odd, in theory, for an insurer to outright refuse to touch something; rather than just jacking the premiums into "the risk of failure is essentially 1

Depending on the line of business and state, the amount of flexibility the carrier has to adjust price varies. I’m less familiar with the Auto line and what the levers to adjust price are. Both filed levers (X is rate 1, Y is rate 2) and variable levers (Z can be between 0.5 and 2.5 at the carriers discretion). Where all those levers are combined to produce a rate. Beyond that, carriers have their own underwriting standards that they may use to exclude risks, especially if there’s no way to adjust the price to account for a higher risk.

This is one reason insurance companies are usually holding companies that own a bunch of rating companies. Each rating company can file different rates with the state and they can quote your policy on a specific one based on the risk conditions. That’s one way to adjust rates that aren’t adjustable.

@Otherbrother

"However, policies for this vehicle have always been available through our commercial insurance division, and now remain available via PPA as well.”

Personal Auto and Commercial Auto would be filed independently and with different conditions. Commercial generally more flexible for the carrier.

I wonder what they did to offset the risk some product manager clearly wanted to get rid of originally.

[teknocholer]

@DenverLett

Keeping a stainless steel refrigerator spot-free is difficult enough. Who would want an entire truck made out of it. Let alone on a truck capable of severing your fingers by closing a door.

Right. Blood will corrode stainless steel before you can say “Get the first aid kit”.

[Beanolini]

@fuzzyfungus

the risk of failure is essentially 1

Given that the insurance will also cover damage to other people’s property (and people themselves), it’s possible for it to be greater than one.

[anothernewbbaccount]

@FGD135

Who needs insurance anyway? The Cybertruck is flawless and indestructible!

Unlike the people or other vehicles it may hit, who will make claims against the Cybertruck owner. Third party insurance is rather important.

@sqlrob

Doesn’t Tesla itself offer insurance?

Hmm - it would need an underwriter with capital (might get the business placed at Lloyd’s of London) to enable Tesla to act as a broker, unless Skum is prepared to put a lot of Tesla capital at risk.

@fuzzyfungus

it seems a bit odd, in theory, for an insurer to outright refuse to touch something; rather than just jacking the premiums into “the risk of failure is essentially 1, so there’s no risk pooling and you are basically paying us to run a savings account for the inevitable replacement” territory

Not sure how insurance is regulated state-by-state in the US, but insurers move in and out of sectors from time to time to balance the exposure on their overall book, fromtime to time. None have underwriters expert in all areas and with sufficient pooling to take risks. Here in UK we’ve seen one or two large insurers exit certain segments (though sometimes they do do it by simply offering premiums nobody can afford).

[Stripes]

@beschizza

though in fairness Cybertruck ownership correlates strongly to people likely to engineer circumstances conducive to failure

I really like the construction of that statement. I would have been tempted to go with “in fairness the Cybertruck has shortcomings, but not nearly so much as many of its owners”…but your is way better. More fancy words and such

@sqlrob

Doesn’t Tesla itself offer insurance? I’m going to guess that’s going to end up being the only provider.

It does, but only in some states. It started doing so because they thought the high safety ratings and various safety features were not being taken into account when setting rates. I think they operate in something like 14 states and do offer significantly lower rates than competitors and are not losing money on it. I dunno if they offer themselves discounts on rapairs to make it all work though, and I expect they cherry picked which states to service based on the insurance rates as well as how easy it was or was not to comply with the local regulations.

(then again a Musk company worried about complying with government regulations? Am I high right now?)

@fuzzyfungus

Does anyone know if there are regulations around what auto insurance must cover/how much it can cost/how the cost must be calculated

Insurance is very heavily regulated, and the regulations vary greatly between states. So it is entirely possibly that in say MD it is too difficult to charge enough to cover specific vehicles, while in PA it isn’t an issue (I’m not in the insurance biz, so I picked two adjacent states out of a hat as opposed to picking ones that might satisfy the example).

@anon29537550

Only one I’ve seen IRL here in the valley likewise was wrapped in a business ad. I guess that makes it a deductible business expense, maybe?

The wrap probably is, the vehicle unless actually used mostly or almost entirely not so much. Doesn’t mean someone might not try it and hope not to get audited though. Or think they will do it but gets shot down by the accountant/tax prep at the end of the year.