Tesla's usage-based insurance rolls out in Texas

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October 23, 2021

Tesla takes on insurtechs with usage-based insurance rollout in Texas

This marks the electric carmaker's first usage-based insurance (UBI) product after launching a traditional insurance program in California two years ago.

In Texas, Tesla's premiums will be based on its proprietary safety score. Tesla could potentially offer cheaper and more flexible coverage than insurtechs, but there may be concerns over the scoring system still being in beta.

The score is calculated by analyzing the customers' real-time driving behavior based on five criteria: instances of forward collision warnings, hard braking, turning corners aggressively, unsafe following, and forced Autopilot disengagement.

Irrespective of any concerns, Tesla drivers in Texas will flock to its coverage amid growing demand for such solutions: Our forecast expects 52.5 million US drivers to buy UBI coverage by 2023, up from 37 million this year.

Insider Intelligence's Victor Chatenay has the full story.

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