Tesla has hired former GEICO executive Allen Laben as its head of strategic insurance partnerships, a new position at Tesla. Laben says his goal in joining the company is to make owning and insuring Tesla vehicles “easy and economical.”
“By partnering with insurance companies, teams across Tesla, and collision shops in the USA and Canada, we’ll lower the total cost of Tesla ownership and accelerate the world’s transition to sustainable energy,” Laben wrote on LinkedIn.
Before starting his role at Tesla, Laben served as GEICO’s director of claims specialty operations. Laben spent nearly 20 years working for the company.
Will lower premiums mean more EV ownership?
Tesla’s goal to decrease repair and insurance costs is part of a larger effort to speed up America’s transition to electric vehicle (EV) usage. So far, broader EV adoption has been an uphill climb.
Demand for electric vehicles is declining, according to the J.D. Power 2024 U.S. Electric Vehicle Consideration Study. In 2022, 26% of shoppers said they were “very likely” to consider purchasing an electric vehicle. In 2023, only 24% were likely to consider buying an EV.
“High insurance premiums on electric vehicles will slow this transition,” says Laben in his LinkedIn post. “That’s where the ‘Insurance Partnerships’ part of the job comes in. Through better communication, processes, and partnerships, we will reduce repair costs and lower insurance prices across the industry.”
The average cost to insure a Tesla is $126 per month for liability insurance and $268 for full-coverage insurance, according to Insurify data. By comparison, national averages for all vehicles are $103 for liability and $210 for full coverage.
What’s next? Tesla’s insurance product keeps growing
Tesla first launched its own insurance product in 2019. Two years later, it introduced a telematics insurance solution using real-time driving behavior instead of driving and claims history to determine insurance premiums. Tesla says its Safety Score determines how safely policyholders drive.
The company now offers its telematics product in Arizona, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia. It continues to use real-time driving behavior in California, since the state bans the use of telematics.
The company has seen dramatic premium growth since it first started selling insurance. Tesla’s insurance outsourcing partners produced $111.7 million in total direct premiums in 2021, and total premiums more than doubled to $255.5 million in 2022. The 2022 number includes policies directly written by Tesla ($12.7 million) and those of its outsourced relationships ($242.9 million).
In 2023, the company wrote $109.9 million in direct premiums, and, combined with its affiliates, total premiums rose to $517.6 million.
