Tesla Granted Extension in Insurance Overcharge Lawsuit

Tesla Granted Extension in Insurance Overcharge Lawsuit
Tesla has been granted additional time to prepare for a lawsuit filed by a customer representing drivers in eleven U.S. states, alleging the company overcharged for insurance through false crash warnings.

The lawsuit, initiated last year, claims that Tesla used “false” crash warnings to inflate insurance premiums instead of relying on actual driving behavior.

Tesla Insurance determines premiums using real-time driving metrics measured by a Safety Score, including factors such as forward collision warnings, hard braking, aggressive turning, unsafe following, excessive speeding, late-night driving, forced Autopilot disengagement, and unbuckled driving. The suit also accuses Tesla of violating California’s unfair competition law.

In court this week, Tesla’s lawyer, Min Kang, explained that gathering the necessary information to defend against the case has taken longer than expected due to the involvement of multiple states and the recent departure of a key employee who was coordinating with outside attorneys. Tesla had previously attempted to have the lawsuit dismissed twice last year, but judges denied both requests.

The states involved in the lawsuit are Arizona, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia, according to a report by Reuters.

Despite these legal challenges, Tesla Insurance concluded the fiscal year of 2023 with nearly $500 million in written premiums, representing an impressive 115% year-over-year increase. This growth follows previous reports of underperformance and an investigation by Reuters that revealed understaffing issues within Tesla Insurance, resulting in some customers facing extended wait times for compensation while continuing to make payments on their damaged vehicles.

Operating primarily in California, Ohio, Arizona, and Illinois, Tesla Insurance Services functions through a fronting arrangement with State National. Under its umbrella, the company saw a notable surge with $387 million in written premiums, marking a substantial 78% year-over-year growth.

Tesla Insurance is distributed through the company’s two licensed carriers, Tesla Property & Casualty and Tesla General Insurance. The premium breakdown by state for 2022 and 2023 highlights the expanded availability of Tesla Insurance in 2023 compared to the previous year, contributing to its significant growth.

Original source: Teslerati.com

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