Tesla Model S has higher insurance losses than other large luxury cars

June 22, 2017

When it comes to insurance losses, the Tesla Model S is an outlier. The luxury sedan has higher claim frequencies and is costlier to fix than gasoline-powered large luxury cars, and it accumulates more miles on average per day than other battery-powered vehicles, a new HLDI report shows.

The Model S is among the nine vehicles HLDI studied in its latest analysis of insurance losses for all-electric models. Analysts compared the loss experience of the Model S, the Nissan Leaf and seven other electric vehicles with losses for similar conventional vehicles under collision and property damage liability coverages and adjusted claim frequencies for mileage, based on data provided by CARFAX.

Collision coverage insures against physical damage to a vehicle in a crash if the driver is at fault. Property damage liability coverage insures against physical damage that at-fault drivers cause to other people's vehicles and property in crashes.

HLDI compared the BMW 1 Series ActiveE, Chevrolet Spark EV, Fiat 500 Electric, Ford Focus electric, Smart ForTwo Electric Drive two-door, Smart ForTwo Electric Drive convertible and Toyota RAV4 EV with gasoline-powered versions of the same models. Nissan doesn't sell a gasoline-powered Leaf, so HLDI compared its losses against the similar Nissan Versa hatchback. Since Tesla only makes electric vehicles, HLDI compared the Model S against losses for conventional large luxury cars.

Under collision and property damage liability coverages, the seven electric vehicles with exact conventional counterparts had lower claim frequencies and higher claim severities than their comparison vehicles. When analysts controlled for mileage in the claim frequency analysis, the differences in the frequency benefits declined but were still significant. The Leaf largely followed the same pattern but had lower claim severities compared with the Versa.

In comparison, the Model S had higher claim frequencies, higher claim severities and higher overall losses than other large luxury cars. Under collision coverage, for example, analysts estimated that the Model S's mileage-adjusted claim frequency was 37 percent higher than the comparison group, claim severity was 64 percent higher, and overall losses were 124 percent higher.

Electric vehicles as a class aren't known for their speed, but that's not the case with the Model S. Tesla calls it "the quickest production car in the world" in promotional literature. Car enthusiast reviews of the Model S seldom fail to mention how fast it accelerates from 0 to 60 mph.

Teslas also are on the road more than comparable large luxury cars. On average, Teslas travel three more miles per day than other large luxury cars, HLDI found. The other electric vehicles in the study logged 11-12 fewer miles per day than their conventional counterparts.

Higher claim severities relate to how pricey it is to repair collision damage relative to average estimates. Electric vehicles in general are more expensive than their gasoline-powered cousins. The average base price of an electric vehicle in HLDI's analysis is about 79 percent higher than it is for a conventional counterpart. The Leaf's base price, for example, is 117 percent higher than the Versa, while the Model S's base price is 33 percent higher than that of a conventional large luxury car.

Estimated collision losses

Electric vs. conventional counterparts

The Model S had higher collision claim frequencies, severities and overall losses than other large luxury cars. The Nissan Leaf’s losses were lower than the gasoline-powered Versa. The seven electric models had lower claim frequencies but higher severities than conventional cars.

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