Tag: EV insurance

  • Tesla Repair Costs High, But Insurance Claims Like New Gas Cars

    Tesla Repair Costs High, But Insurance Claims Like New Gas Cars

    Key Takeaways

    1. High Repair Costs: Teslas have the highest average insurance claims, with repair costs exceeding $6,236 for electric vehicles, significantly impacting insurance rates.

    2. Comparison with Other Vehicles: Mild hybrids are the least expensive to repair, averaging $4,726 per claim, while plug-in hybrids cost about $5,583.

    3. Impact on Rental Companies: High insurance costs and long repair times have led rental companies like Hertz to avoid Tesla vehicles, resulting in financial losses for them.

    4. Concerns About Vandalism: Rising vandalism rates linked to political activities surrounding Elon Musk may lead to increased insurance premiums for Teslas.

    5. Tough Choices for Buyers: Car buyers face difficult decisions between keeping older gas-powered vehicles or opting for mild hybrids due to the high insurance rates of electric vehicles.

    Insuring a Tesla can be quite expensive, as many owners will tell you, and a recent study from parts supplier and insurance company Mitchell explains why that is.

    High Repair Costs

    Interestingly, Teslas have the highest average insurance claims compared to all other brands and types of vehicle propulsion. Last year, the average cost to repair an electric vehicle (EV) in the United States was $6,236, while Tesla repairs tend to be even more expensive. The Model Y and Model 3 contribute largely to the majority of EV claims.

    Comparison with Other Vehicles

    In contrast, mild hybrids are the least expensive to fix, averaging $4,726 per claim for insurers in the US in 2024. Plug-in hybrids, however, do not fare as well, with an average claim cost of $5,583, which is quite substantial.

    Many Tesla owners, who have received some outrageous estimates for minor repairs like bumper replacements, might believe these figures underestimate actual repair costs. It’s important to note that these are just average claims.

    Impact on Rental Companies

    The high costs of insurance and lengthy repair times have led rental companies like Hertz to shy away from Tesla vehicles, resulting in a significant loss when they sold off their Tesla EV fleet.

    In the past year, insurance rates for the top-selling electric models in the US rose by 28%. This is double the increase seen in internal combustion engine (ICE) vehicles, making electric cars 23% more expensive to insure, with an average rate of $3,430. Data analyst Matt Brannon mentions that as of February 2025, the “Tesla Model 3, Model Y, and Model X are the priciest EVs to insure,” with the Model 3 costing around $4,362 per year.

    Concerns About Vandalism

    The Cybertruck, which was once considered uninsurable, is close behind, with an annual insurance rate of $3,813. Insurers are also concerned about rising vandalism rates against Tesla cars linked to Elon Musk’s recent political activities, which could lead to even higher insurance premiums.

    For Tesla owners seeking reassurance, their average insurance claim cost is similar to that of newer gasoline-powered vehicles. As cars become more complex, the latest models filled with electronics and sensors recorded an average claim cost of $6,127 in the US last year. This is only slightly less than the average for electric vehicles, particularly Teslas.

    Tough Choices for Buyers

    This situation leaves car buyers in a tough spot. They have to choose between keeping their older gas-powered vehicles to avoid high insurance rates or opting for mild hybrids instead.

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    Tesla Repair Costs High, But Insurance Claims Like New Gas Cars
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  • Geico Cites Cybertruck Repair Issues for Insurance Cancellations

    Geico Cites Cybertruck Repair Issues for Insurance Cancellations

    Geico has addressed the concerns raised by owners of the Cybertruck regarding denied insurance renewals. The company pointed to the vehicle’s weight and high repair costs as contributing factors, stating that "some customers may have received notices indicating that PPA insurance would not be renewed for this vehicle."

    Availability of Insurance

    Despite these issues, Geico continues to provide private passenger automobile (PPA) insurance for the Cybertruck. For those who do not meet the criteria for PPA, Geico suggests considering their commercial vehicle policies as an alternative.

    Geico offers coverage nationwide for the Tesla Cybertruck. Due to its gross weight and the challenges related to parts availability for repair shops, some customers may have received notifications about the non-renewal of PPA insurance for this specific vehicle. However, insurance policies for the Cybertruck have always been accessible through the commercial insurance division, and PPA is still available. Geico plans to contact any customers who might have gotten a non-renewal notice.

    Cost Implications

    While it may seem unusual to cite the Cybertruck’s gross weight, which ranges from 8,834 lb (4,007 kg) to 9,169 lb (4,159 kg), as a reason for insurance cancellation, the difficulties in repairs certainly make sense. Geico has pointed out the shortage of Cybertruck parts as a justification for denying policy renewals, and evidence from rental companies with electric vehicle fleets supports this perspective.

    Hertz recently held a major sale of its Model 3 fleet, not just because they purchased the vehicles at high prices but also because repairs were slow and their insurance costs were quite high. Research by Gartner indicates that by the time electric vehicle prices match those of gas-powered cars, repair costs and insurance rates are expected to soar.

    Future Trends

    By 2027, it’s anticipated that the average cost for a serious accident repair involving an EV body and battery will rise by 30%. Consequently, vehicles that experience collisions may be more likely to be written off entirely, as repairing them could exceed their remaining value. Additionally, higher repair costs may lead to increased insurance premiums or even result in insurance companies declining coverage for certain car models.

    The high costs of electric vehicle repairs are partly due to the limited availability of replacement parts and the extensive use of gigacasting in manufacturing, including for the Cybertruck. As Tesla’s chief engineer Lars Moravy explains, the front and rear gigacast sections of the Cybertruck act as crush cans with built-in crumple zones. If these sections are damaged in an accident to protect passengers, it leads to significant repair expenses for insurers.

    In the UK, insurers have either refused to cover the Model Y or imposed steep premiums due to the high costs associated with repairing its gigacast rear. In response, Tesla redesigned this component and provided it to repair shops at cost, along with tutorials for replacement, to ease the insurers’ concerns.

    Insurers’ Reactions

    Similar issues may be influencing Geico’s justification for the Cybertruck’s high repair costs in relation to insurance renewals. Other insurers in the US are also recognizing these trends; a prospective Progressive customer received a rejection letter for a new Cybertruck insurance policy after coming from Geico.

    Even when Geico does offer PPA insurance for the Cybertruck, the costs can be quite steep. One owner reported being quoted $3,185 for a six-month insurance term.

    MunroLive (YT), TorqueNews’

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