Many insurers have also dropped specific models of Kia and Hyundai because of their lack of effective anti-theft technology. I say that only to point out that an insurer no longer covering a specific model isn't unprecedented.
The repair costs of the Cybertruck are astronomical and Geico must feel that for the business model to make sense the premiums would also be astronomical, so much so that they opted to get out of the market altogether. It'd be interesting to know whether they're just dropping Full Coverage or dropping All coverage - I'd still think they'd sell you insurance to protect you should you cause damages, which is the minimum insurance required in most (all?) states.
Jalopnik got a statement from GEICO that stated a bit more. https://jalopnik.com/geico-is-cancelling-tesla-cybertruck-po...
"Because of its gross weight and potential challenges with parts availability for repair shops, some customers may have received notices stating that PPA [private passenger automobile] insurance would not be renewed for this vehicle. However, policies for this vehicle have always been available through our commercial insurance division, and now remain available via PPA as well."
I know my insurer (Progressive) is very iffy on Teslas, however there are 20+ year "Lifetime Crown" customers that have some level of overridability on underwriting. After 20+ years they'll even insure you "regardless of changes to your driving status", and I've heard at least one report of someone managing to put a personally owned firetruck on a Progressive policy against underwriting guidelines and Progressive was forced to underwrite it because of the Crown promises to the customer.
Cybertruck's 3mm stainless steel panels are insurance problem. Stainless steel is hard to repair. Normal PDR does not work. The cost of repair for even the most minor accidents is very high. In many cases replacement panel is the cheapest way.
Tesla’s supply chain does not keep up with demand for repair parts.
IIRC, it is also precipitation hardened stainless, so a weld repair would anneal it, cutting the affected area's strength in half.
If you're leasing your Cybertruck, or have financed its purchase, you will be required to carry full coverage. I would imagine this is the case for most people; very few are paying cash for an $80-100K vehicle.
I'm not your dad or anything, but if you don't have the cash to purchase a 6 figure vehicle, you should not be financing a 6 figure loan with auto loan rates.
Sure, ideally you should never borrow money to purchase a depreciating asset, but the reality is most people need a car and they don't have the cash to buy it outright.
I actually do follow this rule for myself, the last car I bought was $4k, paid cash. I'd never spend 5 figures on a car, let alone 6.
There should be zero overlap on a Venn diagram of people scrounging together money for basic transportation and those considering a $100k pseudo-truck. Anyone who needs to borrow money for a basic car but buys a cyber truck instead is in for a world of financial hurt.
There's a couple of strategies to employ:
1. Never buy a new vehicle. Vehicles depreciate most quickly up-front. Buying a vehicle coming off of a lease is often a good bet. Most of the quick depreciation is done and now you're in the period of a slowly depreciating. You also have a relatively new vehicle.
2. Always put down at least 20% of the vehicle's purchase price, i.e. don't finance more than 80%. This does two things. One, it ensures your loan is unlikely to be upside down. Two, it limits how much you can borrow which keeps you from financing fantasies. For example, you had $4K cash for the last car you purchased. Given that, I would say that you should have kept your budget at $20K or under. $20K, even today, can get you a nice used car.
>Buying a vehicle coming off of a lease is often a good bet. Most of the quick depreciation is done and now you're in the period of a slowly depreciating. You also have a relatively new vehicle.
I assume you mean buying a used car that someone else leased from the dealership. If you leased then want to buy out your leased vehicle at the end of the contract, you end up spending more than if you bought it outright.
>Always put down at least 20% of the vehicle's purchase price, i.e. don't finance more than 80%. This does two things. One, it ensures your loan is unlikely to be upside down. Two, it limits how much you can borrow which keeps you from financing fantasies. For example, you had $4K cash for the last car you purchased. Given that, I would say that you should have kept your budget at $20K or under. $20K, even today, can get you a nice used car.
You may not be from the US, but this is typically poor advice. Even with 20% down, you're likely upside down on the loan regardless after a year. US auto dealerships (credit dependent) have great loan rates, zero percent to 3%, which means every dollar you put down is wasted versus putting it in a money market that are getting nearly 5% now. The optimal strategy in this setup is to put zero down, borrow at ridiculously low rates, and get gap insurance for the portion that you're upside down on.
I have not seen zero or very low rate car loans for used cars. You do see them for new cars, but they are just taking whatever they would have given you as a cash discount and converting it into a low rate. Maybe a bit more, as they charge fees on the loan that they roll into the balance owed.
Not necessarily. When I bought a used car a few years ago I got a great rate (< 2.5%) from my local credit union, and the rate the dealership offered was almost as low. Rates are much higher across the board these days, but the principle should still hold.
>You do see them for new cars, but they are just taking whatever they would have given you as a cash discount and converting it into a low rate.
This is no longer true as price negotiations happen before financing discussions. Cash discounts have all but disappeared as dealerships prefer financing: https://www.kbb.com/car-advice/should-i-pay-cash-for-a-new-o...
>Maybe a bit more, as they charge fees on the loan that they roll into the balance owed.
Only if you miss payments. These loans are zero fee and zero/low percent.
I meant up-front loan fees like origination fees, etc. You're saying they don't have those? It's been a long time since I financed a car at a dealer. Also title work/documentation fees, warranties, and whatever else they might talk you into.
You can get a nice used car for $4k if you look at the right cars.
I should have pointed out that $20K is your max budget, and you don't have to budget your max. Getting a nice used car for $4K is a bit challenging but do-able. Under $10K opens up a lot of options for you. But yes, we're both in agreement that paying the kind of money people are paying today for a car is unnecessary. It's about want more than need.
They say you should try to never finance more than 20% of your annual income on a car.
Make $60k? Find a car for $12k or less. Find a perfect car for $13k? Pay the extra $1,000 down.
Hard sell but cars are such a waste of money in almost every aspect. They shouldn't tank your ability to afford your life any more than they absolutely must.
I feel like we need more definition of a $4k nice car. Make, model, model year, and miles would go along way. Even better if there is a link or two to someplace like cargurus.com, carfax.com or caredge.com with car in question.
Even if you do have cash to purchase a 6 figure vehicle without financing, getting financing or leasing often makes some sense. And very few people want to not carry collision insurance on a new car even if they paid cash for it.
Yes. Like with a Ferrari, you should only purchase one if you can afford to drive it into a wall.
And yet I'm sure that vast majority of Cybertrucks are purchased using financing.
Wouldn't surprise me if they dropped insurance protecting you from causing damages. As I understand it, the sharp edges and unyielding metal panels may mean they'd cause a lot more damage than an equivalent vehicle. So unless it's legally required, no form of insurance may be economically viable.
The attitude on display at Kia for security is just shocking https://news.ycombinator.com/item?id=41658733
A car that can't be registered in Europe because it doesn't meet safety standards has problems getting insurance where it can be registered... that's not particularly surprising?
I guess it would've been "nice" if they just increased the rates to cover the higher risk, but it looks like at some point they decided it's not worth bothering. It's a free market, they're free to not offer service...
It can be registered in Europe, many countries allow individual car import from the US. I have seen a few around; not on public streets (car shows), but with local plates.
You also won't have any issue getting third-party damage insurance in Europe, as the insurance companies are required to make an offer.
I'm aware of single/custom car special procedures, but last I checked the Cybertruck can't get a type approval in any EU country. Individual registering them vs. not being able to register them doesn't really make a difference for the argument, does it?
Honestly I might even have bought a nice electric truck, but that weird box on wheels just ain't it :(
Where do you check if it can get a type approval? I don't think that's something you can easily determine just by looking at it and saying "yeah too big, doesn't look right, not european enough". There are very weird things with type approvals in Europe. Don't mistake it for some super rational land. Note that even mega-trucks can be street legal in Europe, and most traditional American big pickups like Dodge RAM are type approved - why not a Cybertruck then?
Europe will type approve anything that proves it's safe and follows basic conventions. That will most likely include the Cybertruck, as the question really isn't "is this car a good idea?" - even bad products that nobody needs or wants get type approved, and Cybertruck really will not be the worst thing that happened to European roads.
Tesla knows very well how to get a US car type approved in EU with minimal adjustments. It was very curious to watch with previous models. They are quick, too.
> Where do you check if it can get a type approval?
There's an abundance of news articles about Tesla's VP of Vehicle Engineering, Lars Moravy, saying they can't get it due to some 3.2mm exterior radius requirement that is impossible to do on the 1.4mm stainless steel they use:
https://www.topgear.com/car-reviews/tesla/cybertruck/buying
https://motortrends.net/news/tesla-cybertruck-wont-enter-eur...
If the car model has CoC number, it has been type approved. EU keeps approval register. The CoC is not limited to EU It works in every European country.
Tesla has announced that they are in process of making Cybertruck version that complies with EU regulation, but Cybertruck is hard to adjust. Lack of crumple zones is a big issue.
Getting it approved as commercial vehicle should not be a problem, but nobody wants that. Not Tesla, and not the consumers.
Well you can have a look at the rules and see for yourself, they are not that weird but very complicated. But I assume that if it would be possible, Tesla would try to get it approved.
> most of the traditional American big pickups like Dodge RAM are type approved - why not a Cybertruck then?
I'd guess pedestrian safety would be one of the main issues.
I know the rules very well, special cars are kind of my hobby. There is nothing that couldn't be minimally adjusted to meet European regulations. Pedestrian safety is definitely not an issue. There are much more unsafe vehicles than Cybertruck in that regard.
Every model Tesla introduced was US only first few years. People individually imported the first hundreds of cars during these initial years. Tesla then introduced an European version of the car with technically minimal adjustments.
Have you been able to find safety statistics for pedestrian collisions? I tried looking them up, but was unable to find any.
Naive comparisons like "the hood is lower" are not enough to make this kind of statement, as the remaining differences (sharp angles and a very different material) are too large to make this determination without actual testing.
Try to look into national government statistics agencies, these might track it. European-wide aggregate that you could trust is probably available only for money.
I haven't been able to find any. What absolutely shocked me is that even in America, apparently there has been no such test done by anyone besides Tesla.
How did you come to your earlier assessment? Did you ignore the differences in material and sharp angles? I'm not well-versed in the area, but it seems more than reasonable that they have an impact on the outcome of pedestrian collisions.
> Pedestrian safety is definitely not an issue. There are much more unsafe vehicles than Cybertruck in that regard.
Purely out of curiosity — can you name one or two such vehicles? I'm really interested how they are so unsafe, or rather, which byzantine (non-?)regulation deems them so unsafe :D
My point is that there is no such regulation. But anything that used to be military and sold to civilian usage would qualify. Very common in Eastern Europe, though most of the vehicles of the Cold War have rusted by now.
Are you sure there is no such regulation? We are talking about type approval, not individual registration, and the EU Reg 2019/2144 says:
Regulation (EC) No 78/2009 of the European Parliament and of the Council (9) sets out requirements for the protection of pedestrians, cyclists and other vulnerable road users in the form of compliance tests and limit values for the type-approval of vehicles with regard to their front structure and for the type-approval of frontal protection systems (for example, bull-bars). Since the adoption of Regulation (EC) No 78/2009, technical requirements and test procedures for vehicles have developed further at UN level to take account of technical progress. UN Regulation No 127 laying down uniform provisions concerning the approval of motor vehicles with regard to their pedestrian safety performance (‘UN Regulation No 127’) currently also applies in the Union in respect to type-approval of motor vehicles.
As your own quote implies, even bull bars can be type approved. There is no reason why a Cybertruck couldn't.
Do you genuinely believe that if there were any way to get this thing type approved in an EU country, no one would have done so by now?
As you are fully aware, it does not imply any bull bars can be type approved (and there are a lot less such new cars as there were in the 90's and 00's in our country).
So: 1) the regulation you said does not exist does in fact exist,
2) it may be one of the reasons the Cybertruck is not yet type approved.
> My point is that there is no such regulation.
Yeah, Sorry, I worded that poorly. Can you give an example of a car that is more unsafe (by some generic reasoning) than the Cybertruck, but still type approved?
Rivian’s are kind of nice, but I don’t know if they will survive as a company. Ford EV trucks are fine as well, I’ve driven both. I personally own a hybrid plug-in SUV which lets me go as far as I like on vacation while also letting me be pure EV for all my local driving which is probably 90% of it and I really don’t drive that much tbh
I actually would consider an EV pickup truck. My uses for a truck are almost entirely local, so range concerns would be much less. EVs are still too expensive for me however. For now when I need to haul something that won't fit in my car, I rent a trailer.
I’m surprised that the article doesn’t mention the complete lack of pedestrian safety, which is so bad the truck can’t be sold in Europe. Geico might not want to pay those claims of sharp steel edges ripping into people.
> I’m surprised that the article doesn’t mention the complete lack of pedestrian safety, which is so bad the truck can’t be sold in Europe
I mean that's not a Cybertruck-exclusive problem
Is it actually hard to tell when someone says something like this that they’re referring to extreme points along a spectrum?
Nobody would interpret “the Cybertruck is really bad for pedestrian safety” as “all other trucks are completely fine” or frankly even as “bicycles and rollerblades pose no risk at all to pedestrians.”
What do you mean? It's basically steel blades and sharp/pointy edges on wheels. I'm sure other vehicles will hurt if they hit a pedestrian at speed, but even getting hit at 5 mph by the cybertruck could create very dangerous wounds.
Hardly a Tesla problem though, the grill culture of suvs and trucks is a thing because pedestrian safety is not a design consideration.
An F150 or Dodge RAM, despite being ludicrously large, is much less dangerous than the cybertruck at low speeds because instead of sharp and jagged protrusions they just have a smooth wall-like front end.
At high speeds? Compare their weights and you'll see that making a pickup truck electric also makes it really heavy.
At high speeds pedestrians are dead anyway. The problem with extra weight is that over a certain weight trucks plow through safety barriers into oncoming traffic when get loose control
I’m not sure that is the case, but if it is, it’s interesting to me as a fairly extreme example of the free market self regulating.
I think we've started to enter a weird space. For a number of "necessary" things in life (in the US), one needs to purchase insurance - in some cases its required by law, or an unavoidable policy of obtaining a loan. Cars and houses.
But insurers have started just refusing to insure some cars, or homes in some locations (and we're not just talking about building in a flood plane). We're going to have piles of cars and homes that no one can use because the risk profile is too high for insurers.
Insurance costs are financial signal that your financial decisions are bad. They won't insure high climate risk areas? You don't live there. They won't insure high risk vehicles? You don't buy them. You can ignore this if you're wealthy enough to self insure, but for the rest of us, you don't have to believe in the risk; the financial system and the risk modeler data they consume believes in it for you [1].
My homeowner's insurance through Citizens in Florida is approaching $5k/year. It will likely go up at least $1k/year, if not more, next year. Citizens is requiring all homes to carry flood insurance eventually, even if there is no flood risk. I will likely have to pay a surcharge after Hurricane Milton due to Citizens having insufficient reserves for the amount of climate related claim loss they are experiencing (such is the peril of socialized, insurer of last resort systems). This will likely push me to sell my primary residence, my last property in Florida I have not liquidated, and move somewhere with much lower climate risk. This is the system working as intended, telling people to leave places too expensive to insure.
We are collectively internalizing the previously ignored and/or externalized costs. It should be expected that this process will be painful and messy as risk pricing snaps to reality.
(folks not of means who live where climate risk has accelerated ahead of what they can afford should be bought out and provided assistance to relocate to where the risk is lower, and their property acquired by an entity that will hold it in perpetuity to prevent further development or occupancy, for the record; FEMA does this, but this must be done at a much larger scale imho)
>They won't insure high climate risk areas? You don't live there. They won't insure high risk vehicles? You don't buy them
Yes, but there are already people who own cybertrucks or live in these places.
That is unfortunate. Life isn't fair. Not a judgement call, just an observation of the reality we live in. Can't find a Cybertruck insurer and can't self insure? Sell it. If Tesla wants to sell them, they can provide insurance as part of Tesla Insurance [1], if Tesla believes they can effectively manage the risk of their insured cohort and the modeled vehicle losses. If Tesla won't insure their own Cybertrucks, also sends valuable signal.
I thought I sufficiently covered my position on places people live in my top comment, but to reiterate: we should absolutely and unequivocally help folks move who need help moving away from climate risk, and very aggressively, through policy and financial signals, inhibit folks from moving to where the climate risk is beyond an agreed upon collective risk appetite (which sets policy, financial signal, etc). This will make folks sad, but to not will make them more sad when the risk exposure is realized.
Potentially related:
https://www.redfin.com/news/hurricane-helene-impacting-reloc... ("Redfin: Nearly One-Third of Young Adults Say Hurricane Helene Has Made Them Reconsider Where They Want to Live in the Future: Survey")
If you can afford an $80,000 Cybertruck I would expect you can afford to trade it in for a vehicle you can insure.
This is a pretty fundamentally flawed view. What about life or health insurance? Life insurance high, then what, stop living? Health insurance high, so stop getting sick?
Obviously the finances work such that net-net the insurance companies make more money in the end, but insurance is about individual level risk. Most likely (even hopefully) my insurance payments will be a net-loser, but IF I need it then they can prevent catastrophic financial loss.
These are bad analogies:
> Life insurance high, then what, stop living?
You seem to confuse what life insurance is for - it's not for the person being insured, it's for their dependents (at least with respect to term life). And it already happens all the time that life insurance gets too expensive, so people forego it. It's one reason that financial planners recommend getting life insurance when you're young, when you're healthier and it's cheaper. Also, as you age it becomes less likely that you'll have dependents that need you to have life insurance.
As others have pointed out, the debate over health insurance shouldn't confuse the debate over other types of insurance. Many societies have accepted the viewpoint that everyone should have health insurance as a fundamental right, even if they have a horrible risk profile and it's uneconomic. I don't think anyone can make that argument about someone's "right" to drive a car that is inherently dangerous to other road users and horribly expensive to repair.
I believe health insurance (really, access to healthcare) is a human right. Life insurance can discriminate against you based on your health current state, and some people cannot get life insurance (or the cost is exceptionally exorbitant, because it is properly pricing the risk of loss). I don't believe someone is entitled to live where ever they want, or drive whatever they want, from an insurability perspective. We might just disagree on this philosophically, my apologies in advance.
> but insurance is about individual level risk
Insurance is about pooled risk, avoiding adverse selection, and balancing the risk of loss with whatever the pool criteria and objectives are. We can insure what should be insurance, and we can cut checks to what should just be aid, support, etc. Knowing which is which is important though if we operate under the assumption that resources are finite.
https://www.actuary.org/sites/default/files/pdf/health/pool_...
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People should take heed in what premiums insurance places on things. They are in the business of pricing risk, independent of political or social bias. They lose money if they have ideologues as actuaries. They make money if their assessments match reality.
So when insurance companies are dropping coverage for things, it's a strong signal that you should too(unless you have a high appetite for risk.)
I once walked away from a home purchase because my insurer refused to insure it against termite damage. Why? Synthetic stucco siding in the US south.
I just searched online and homeowners insurance policies typically don't cover termite damage.
I assume this isn't actually a huge financial risk since mortgage companies don't care if you have it? In other words you'd self insure for it.
In most parts of the country it's not a very big risk. Most insurance doesn't cover earthquake damage either by default, though it can often be added.
Mine does cover as long I use a termite service for prevention. But wouldn't for this house.
Do termites like synthetic stucco? What is it made of? Sawdust?
No, it's the wood framing underneath the synthetic stucco that can't really be easily monitored or checked that's the problem.
I'm not familiar with the termite threat, but water damage issues with EIFS (the technical name for synthetic stucco is Exterior Insulation and Finish System) is a big and famous deal: https://en.wikipedia.org/wiki/Leaky_condo_crisis
The basic issue is that you can't really check what's going inside the EIFS so if water (or termites, I suppose) does get inside it can't get out and you can't really know until it collapses because the wood framing is gone. Even if you check every year, if the probe missed the bad spot then you've no way of knowing.
For such a wet damp environment like British Columbia what is the recommended or tried and true way to build without suffering rot?
I'm not saying that Geico is being a bunch of ideologues here. But it wouldn't be the first time an insurance company has done that, see https://www.lemonade.com/blog/insuring-guns-lemonade-takes-s...
This what insurance requirements are for. Keep people from doing things with bad risk profiles. As long as insurance is a competitive market, the only activities prohibited by insurance requirements will be those that people wouldn't have been able to afford anyway (long term).
It varies state by state in the US but the level of insurance you're required to buy for operating a vehicle is incredibly low. Generally, the level of insurance you must buy is dictated by the terms of financing because the only collateral the bank has is the vehicle itself.
If I were in the market for a CyberTruck (I'm not) I'd be thinking long and hard about what I'm getting myself into.
In my state, you can get out of the insurance requirement by holding $30k in escrow (or at least that's what it was about ten years ago; maybe they've increased it). I guess maybe it's meant to be indicative that you could get your hands on more cash if needed, but that's basically only enough to cover a fender bender. If there's injuries or a totalled vehicle, it's likely not sufficient.
If there's injury, $30k would only cover a day or two in the hospital, might not even cover ER expenses, as they'll be charged at list price not the "negotiated" rates insurance companies pay.
$30k is an absurdly small bond to post for self-insurance, though I'd believe that the regulations have not kept pace with reality.
The cash rate is similar to insurance negotiated rates. Typically 25-30% off automatically, 50-100% off with a financial aid application. Doesn’t change the inadequacy of $30k medical liability in a serious wreck, but don’t think you’re stuck with list price bills if you’re hit by an underinsured driver and have no health insurance.
Are you in California? The requirement is to either a bond $35k or to carry a liability policy that covers at least $30k for death and injury and $5k for property damage, matching the deposit requirement. That will increase to $75k in 2025, which still seems far too low.
For comparison EU mandates liability policy of 1.22M euro for property damage and up to 6.07M euro for injuries. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52...
I'm not. I'm surprised it's so low in CA.
> We're going to have piles of cars and homes that no one can use because the risk profile is too high for insurers.
That is entirely the point. If you build a house or vehicle that is horrible from a risk perspective, don't expect someone else to take in that risk.
*Floodplain: https://en.m.wikipedia.org/wiki/Floodplain
Mostly, but not always, legal auto insurance requirements don't strictly require insurance. If you can afford a cybertruck, you can probably afford to post a $75,000 bond or deposit with the California DMV (increases from $35k on Jan 1, 2025). Assuming you can't get liability coverage elsewhere.
For mortgage insurance, my understanding is if you don't carry property insurance, the lender can obtain lender placed insurance at your cost. That comes from a different, more expensive, market than direct homeowner insurance, but I believe it includes guaranteed issuance. But, if that falls through, I expect the lenders will stop lending, because they can't sell to fannie mae if it has no property coverage.
Wouldn't people just secure higher cost insurance to offset the risk?
Many states require approval for various rates, so it’s easier to just not insure.
At some point that becomes unaffordable for most people.
Then it becomes like insuring priceless art, people are just priced out of it, especially if it's a requirement to owning/driving it in the first place.
Perhaps these become undrivable and get their own stage in some art hall.
In many places there is no higher cost insurance to offset the risk.
Strange.
AFAIK in Europe car insurance is obligatory and insurance companies can't refuse to sell it to you (if they did it would be mind blowing, catch 22)
Nothing to prevent them giving you an "F U quote" of say 6k for a year though - they've offered to insure, you've declined their price (speaking from UK perspective)
Homeowners insurance is tricky for both good and bad reasons. Florida's homeowner's insurance market being so dysfunctional is a blinking red warning sign that things like Hurricane Milton are only getting more common. That's a market sending out a reasonable signal- hurricane risk on a low-lying state right next to the Gulf of Mexico and central Atlantic is bad and going to get worse in the future.
But California's homeowners insurance market is screwed up for legal reasons, and it isn't even the legislature's fault or something they can easily fix. It's the fault of Proposition 103, where a whole bunch of massive changes were made to how homeowners insurance worked, in 1988, by a 51-49 vote of the electorate. And the way that prop's work is that the legislature can't amend or change these regulations. The only way to fix it is another proposition to roll back those rules, where the electorate realizes that they did something dumb and agrees to fix it.
Among many other changes, this proposition specifically enumerates what kinds of models an insurance company can use to justify their rates (1). In 1988 global climate change models weren't a thing, so they're not on the list. And while with legislative regulations it would be easy to add an extra model type in as a side-amendment into a much larger bill (that sort of stuff happens all the time!) the California initiative system means that the state legislature can't change any of it. So they are really struggling with the rise of wildfires in particular, the insurance companies run their real models of what the risks will be, and then when they run the approved models they have to try and figure out how to get the approved models to capture that risk and it's really hard to do. The approved models basically force the companies to use the previous seven years of costs only, but if you believe that the risk of wildfires is steadily growing that underlying bias will destroy your company. So the only alternative is to withdraw from the market. Which is why major insurers who can are withdrawing (or threatening to withdraw as part of negotiations to try and force the IC to approve even larger rate hikes!) and smaller, less well capitalized insurers are taking a greater share, but will probably need to be bailed out if there is another bad fire season.
I live- and own a home!- in a nearby state where the real estate market is buoyed largely by people who are leaving California because of their dysfunctional real estate market (Prop 13 is the famous one but these are all pretty bad). So it's actually against my financial interest for California to fix their problems, but I want them to anyway because it's so intensely frustrating for me and I don't even live there.
1: To the directly elected Insurance Commission- another change in Prop 103- who has to approve all rate changes, which is now an ~18 month process, because of a third thing created in this proposition. The Consumer Intervenor's Process means that basically anyone can challenge a rate hike and if they convince the Commission that the hikes were too high then they get their costs and time paid for by the company that lost the rate hike. So there are people in California who make their living as private citizens reviewing and challenging all insurance company rate hikes.
California in this regard seems to be a good example of why direct democracy is a bad idea, at least in practice.
> Florida's homeowner's insurance market being so dysfunctional is a blinking red warning sign that things like Hurricane Milton are only getting more common. That's a market sending out a reasonable signal- hurricane risk
Reinsurers have an even more accurate model for this that they've shared with NOAA but that information is subject to NDA for now.
So the insurers absolutely know that this is just getting worse.
Geico also doesn’t insure certain models of McLarens, Lamborghinis, Jaguars, Bugattis. A quick search reveals there have also been certain Kia and Huyandai models that they don’t insure.
> McLarens, Lamborghinis, Jaguars, Bugattis
So they don't insure[1] high end exotics and supercars[2]. I wasn't aware the Cyber Truck was a supercar.
[1] There's also a difference between not offering coverage and actively terminating coverage that was previously offered.
[2] They actually insure basically all Jaguars. There are a couple of people complaining that their rates for a high performance Jaguar model, as a young male, are steep, but that's not exactly the same.
> A quick search reveals there have also been certain Kia and Huyandai models that they don’t insure.
Which I'm fairly certain made the news, too.
Your comment just seems like "Why is this news?"
Even with the Kia and Hyundai theft issues, they didn't terminate coverage, they just issued notices of non-renewal.
They're actively terminating current and open policies for the CyberTruck as quickly as they are legally allowed to. That's why.
> They're actively terminating current and open policies for the CyberTruck as quickly as they are legally allowed to
I am not sure they are actively cancelling insurance as you claim. The main email that caused this news cycle says specifically:
“ ALL COVERAGE ON THE 2024 TESLA CYBERTRUCK PROVIDED BY GEICO CASUALTY COMPANY, UNDER THE ABOVE POLICY NUMBER, WILL NON-RENEW AS OF 12:01 A.M. ON xx/xx/xx.”
https://www.torquenews.com/11826/geico-terminating-insurance...
Which seems to be a non renewal notice.
> So they don't insure[1] high end exotics and supercars[2]. I wasn't aware the Cyber Truck was a supercar.
It’s clearly an exotic…
> “It makes no sense, as there are other, riskier cars out there. Let me know if you recommend any insurer for the truck. I have eight cars with an amazing record. I will be canceling my entire Geico policy!! Bye-bye!”
Eight cars. Eight. Our planet (for humans anyway) is truly screwed.
I’m imagining quite the redneck-y front yard.
My imagination does not have the person who bought a Cybertruck as their eighth car storing cars on their front yard.
What's the difference if someone has 8 cars or one car? He can only drive one at a time. And at least one is electric.
Resources to build them, for one.
Each car will likely get used less under him, and then eventually sold/gifted to others at a discounted rate. Those cars will most likely get used through their useful lifespan without any more or less effect on the world than they would have otherwise.
> Each car will likely get used less under him
It will for sure be used much more than if it didn't exist
they were likely paid for?
yes, most vehicles are, that doesn’t eliminate the environmental impact.
TLDR: If he buys a car a year, and drives the same number of miles as the average American, his total emissions are probably equal to someone who drives 28k miles a year.
Carbon emissions for a Model 3 vs a Toyota Corolla even out after 13'500 miles according to Argonne National Laboratory [1], which is slightly less than the average an American drives per year (14'263 miles [2]). Assuming that he drives as much as the average driver, his cars generate as much Co2 as a Model 3 (definitely not true for the Cybertruck, but he probably has low-build-emission ICE cars in the other 8 to lower the average), and he buys a car a year, he has roughly the equivalent emissions of someone who drives twice the average number of miles each year. For reference, a long haul driver (of which there are 300k-500k in the US [3]) drives 100-110k miles [4] a year (7-8x the average).
[1] https://www.reuters.com/business/autos-transportation/when-d...
[2] https://www.thezebra.com/resources/driving/average-miles-dri....
[3] https://www.npr.org/sections/money/2021/05/25/999784202/is-t....
[4] https://www.caltrux.org/driver-faqs/#:~:text=Begin%20a%20Car....
Truck drivers are doing a commercial activity where it is reasonable to largely attribute the emissions to the customer.
Yes, those Americans driving on average 77 miles a day. Every day.
Personal vehicles? Commercial vehicles? Small business?
As folks get older, they usually become responsible for other people.
Yes, I’m sure the eight vehicles are for him, his wife and six driving age children. To all drive at the same time.
You don't know what the context for those registrations is. You just make assumptions.
Every thought you have is an assumption, the question is how well-founded they are.
Good luck basing your life on assumptions.
Absent things that are pure math isn't everything Humanity "knows" basically a series of, while highly supported by evidence in a lot of cases, just assumptions about the way things really work?
There’s no pure math in making assumptions about someone’s registrations. In optimal situation one may ask a question. In suboptimal one has to give a benefit of the doubt. An example: lawyers don’t assume. Almost everyone else just assumes stuff. Assuming and not seeking for verification is why there’s so much disconnect between individuals.
Do you not have 8 computers in your home that are capable of sending email, browsing the web, and doing taxes? Why do you have so many?
Even if I did have 8 computers, which would be weird but OK, it’d be a fraction of the resources used to make one car.
Can someone find more about why GEICO did this? It makes no sense. Furthermore, they could just increase rates if they found accidents too common.
Also, there are much less safe cars out there for pedestrians such as the Hummer EV (complete behemoth) or Rivian (weighs more than CT and has significantly higher frontal profile which is shown to be the largest contributor to pedestrian safety above basically anything else). If it's about breakdowns, that money comes from Tesla's wallet so would make no sense. Even so, I see Cybertrucks driving daily and haven't seen a broken down one yet.
My understanding is that any damage to the cybertruck unibody frame, no matter how minor, becomes a catastrophicly expensive repair. There are many laws surrounding fair pricing of insurance rates, and Geico might not want to go through the legal work of justifying massive rate hikes specific to the Cybertruck over just dropping such a tiny volume of vehicles, especially if their "profitable" pricing just drives all their customers away anyways. Also keep in mind that in the meantime they're locked into their current rates until each state approves a higher rate.
Rivian is likely heading this way too, there's plenty of stories about a fender bending costing 42000 to fix
https://www.theautopian.com/heres-why-that-rivian-r1t-repair...
It looks like the Cybertruck is more like a Delorean than I thought!
Insurers work with data/metrics and generally make decisions based on that alone[1]. I often feel that it's unfair that I pay more as a male, because I am an extremely responsible and defensive driver - fact is, men cause more expensive accidents more often. That's the data, that's what insurers care about.
At some point Geico likely did insure super cars, up until they started becoming highly anomalous in the data. The same has happened to cybertrucks, whether your highly restricted sample demonstrates it or not.
Insurance companies don't turn away profitable customers. Cybertrucks became a problem for Geico, but they are being tight lipped as to why; it might not be a reliability issue.
[1]: https://en.wikipedia.org/wiki/Quantitative_analysis_(finance...
> I often feel that it's unfair that I pay more as a male, because I am an extremely responsible and defensive driver - fact is, men cause more expensive accidents more often. That's the data, that's what insurers care about.
Same - I remember a few friends complaining about this but an older friend basically explaining how insurance worked from the perspective of the company. Almost everyone will swear that they’re a great driver, and they can’t tell the difference until you’ve been driving for years. The only alternative would be the kind of monitoring + speed limiters that most drivers get extremely upset about so it’s unlikely to change before we get L5 self-driving.
> they could just raise rates
Well, they (insurance companies in general ) also dropped a lot of homeowners in certain states, rather than simply raising the rates.
Perhaps they have done some market research and determined that there is an inflection point beyond which raising rates would actually reduce profits due to reduced competitiveness
Car insurance in general is a race to the bottom with competition. A good quarter has 70% of incoming premium going out to settle claims.
When you have fender bender claims costing 20-40k USD to repair, how do you price that risk?
> When you have fender bender claims costing 20-40k USD to repair, how do you price that risk?
This is a solved problem. Ask any actuary who specializes in casualty insurance, or read a standard textbook about non-life insurance mathematics.
Not really, car insurance rates need to go through alot of state level validation in order to be approved.
Other models are not considered insurable by GEICO as well. So likely small pool of policyholders + exorbiant claim payments == not worth the headache
Shush, I want to see a YC25 auto insurance startup that uses a pile of overheated video cards as a crystal ball to make underwriting decisions.
most people buying specialty casualty insurance also have MUCH deeper pockets than even most people buying a cyber truck
> Can someone find more about why GEICO did this? It makes no sense. Furthermore, they could just increase rates if they found accidents too common.
Very few insurers will insure literally anything (back in the day, Lloyds of London were notably unusual in that they would write a policy on basically anything, though you mightn't like the cost). Most conventional insurers will have a line after which they say "this is too risky, we'll leave it to specialist insurers". Ask anyone who's ever tried to get insurance on a non-conventional-construction house.
And it's a pretty niche vehicle; if they do find it unacceptably risky, then dropping it is presumably a fairly easy decision.
Good point I had not thought about the remaining parts of the economics if they did go though with something like a rate hike.
The reasons listed in the article are spot on. Ridiculously high repair costs is enough. With ridiculously high repair costs come extended repair times (rental car and claims management). There comes a point where just increasing the premium price can't offset risk.
There is nothing practical about Cybertruck ("Cybertruck," really?). It's a collector's vehicle.
A recent filing "revealed that Tesla has now built and sold 27,185 Foundation-Series Cybertrucks for customers."
https://www.notateslaapp.com/news/2296/nhtsa-reveals-tesla-c...
I often ask in regards to terminating commercial offers of goods and services with a floating price point:
Why? Why not just adjust the price to be commensurate with the cost?
If you have to make a price for one-off customer, you end up having to support that use case as long as they are a customer. You may need to change your entire business model just to support them. If they leave, all that change is worth nothing. Unless you're in the business of doing custom work, it's unlikely to be worth the opportunity cost elsewhere.
After a certain point it's not about money. Your time and attention is worth more than they would ever be willing to pay.
If the customer wants it that badly, they can pay the price to get it from someone else.
Nobody will pay for it and they get hit with headlines that say “Geico raises rates on some customers by x,000%!”
Doesn't Tesla offer their own car insurance? I doubt they would drop one of their own vehicles, but the first page of search results showed a lot of negative comments.
Telsa insurance snoops on your driving and behavior.
That's good though? I'd love for my premium to not subsidize the payouts to parties involved in crashes caused by aggressive drivers.
LOL the downvote. This site is entertaining.
I wonder if your premium is higher if you've bought Ludicrous Mode, because there's a higher possibility of you being one of those ... aggressive drivers.
I certainly hope so. Although using geofencing around private roads/tracks to determine where the aggressive maneuvers are being used would be most fair.
Like if someone's driving metrics are totally smooth and predictable on public roads, but then they go nuts on a race track, a lower premium makes sense.
Now that I type that out, how does car insurance work while driving on a private race track?
Maybe just owning a Cybertruck is evidence enough that you're an aggressive driver. It's heavily marketed as being so strong that in case of any collision, it "will win". Someone who dropped six figures on the Cybertruck is going to want to drive it to the limit suggested by all the advertising.
You’re probably being downvoted because the metrics they use do not measure whether you are a safe driver.
The metrics simply correlate with accident rates. For example, your premiums increase if you drive late at night, which does not mean that you are a bad driver. Their metrics also do not punish you for accelerating aggressively or driving at high rates of speed (only if you turn too fast or hit the brakes too hard, but if I slam on the brakes in the name of safety, or perform an evasive maneuver, does that mean I am an unsafe driver?)
Also, it’s worth pointing out other insurance companies have a solution for this that has worked for decades. If someone proves they are an unsafe driver by receiving a infraction or filing a claim, then you adjust the rates. No need to spy on the person with invasive amounts of data, or use arbitrary metrics that use correlation instead of causation. But Tesla has to reinvent things that were not broken in the first place, like door handles (just replaced the door handle on a brand new model S because dust got in there LOL).
> if I slam on the brakes in the name of safety, or perform an evasive maneuver, does that mean I am an unsafe driver?
If you have to frequently do that, it's probably because you put yourself in situations where an earlier safer choice of action would have avoided the need. Frequent abrupt/high-G maneuvers to turn accidents into near-misses probably does correlate strongly with future losses (you’re eventually going to “fail to miss”).
"A superior pilot uses his superior judgment to avoid situations which require the use of his superior skill.” — Frank Borman.
It's a nice sounding quip, but I don't agree at all. The pilot putting themselves in risky situations will acquire a superior skill. Which will partially, but not nearly fully, compensate for the risky situations they put themselves in.
A bear whisperer is more likely than an average person to be eaten by a bear. An experienced cave diver is more likely than an average person to drown.
The airline pilot putting themselves in risky situations for training value is doing that in a simulator, not while flying the line.
I responded to your quote, which didn't restrict itself to airline pilots. There are also people flying their own planes for fun. And military pilots. Both of which may pull risky stunts in real planes.
I am a GA pilot. I also do sim-based training rather than going out and doing risky in-airplane training in order to be safer. (There are some things that we do in airplane because it’s the most effective way available, but most of the really risky items we also do only in the sim.)
I confined my upthread answer to airline pilots because that’s what’s familiar and relevant to most readers and seems most directly relevant to risk-reduction for passengers/non-participants. (We don’t do risky training exercises with pax on board either.)
The point you're missing is that the risk-taking & skill-honing that aggressive drivers perform is being done on public roads with other drivers who just want to commute safely.
Your arguments are about pilots training in controlled conditions that don't put others at unnecessary, non-consensual risk.
Teslas offering isn’t particularly different from any of the other traditional insurance companies that offer the OBD2 dongle or companion app to monitor your driving. The only difference is there’s no opt out for a higher rate.
Also, Tesla isn’t unique here. Root insurance did this well before Tesla did.
I mean if you don't think Tesla already records everything you do in your Tesla car, I don't know what to say.
That's not unusual at all. I'd bet every insurance company us trying to, and some straight-up offer discounts to do so.
I prefer the honesty really....
https://www.businessinsider.com/auto-insurance-monitor-drivi...
Tesla Insurance is only available in 12 states.
That's quite the conflict of interests.
For example; do you want your insurance provider to be the same entity that sold you the "beta" software responsible for causing your fatal accident?
In the same vein, don't get kaiser permanente health insurance. They will not fight hard on your behalf when their hospital injures you through gross negligence/incompetence.
Is their any evidence of this applying to anyone other than this specific example?
I ask as I cannot find any. And the email quoted is quite specific ("reviewing YOUR record" and "YOUR policy is being cancelled").
Being on a multi-car policy complicates the logic here. As does the specific location (California has laws limiting insurance rate increases that lead to exactly this).
But it's entirely that this is an isolated change with nothing to do with the overall vehicle.
The fact he has 8 other cars makes me suspect he hit some limit they had not previously enforced...