40% of Tesla crashes in US are total losses due to high repair, labour costs, says former insurance VP

40% of Tesla crashes in US are total losses due to high repair, labour costs, says former insurance VP

A new interview with Tesla’s former vice president of insurance has shed light on just how much of a liability its cars – and potentially other electric vehicles as well – are to insurers. A snippet of it tweeted by investment research house In Practise revealed that as much as 40% of crashed Teslas insured by the carmaker in the US ended up being total losses.

This high ratio has allegedly caused Tesla Insurance to run at a 150% loss ratio (the ratio of losses to premiums earned), said the former exec. However, the company was making money off salvaging parts “because I was getting such high returns,” although there were issues with salvage companies like Copart and IAA mishandling batteries, either by not charging them or damaging their casings with forklifts.

Now, this shouldn’t necessarily be taken to mean that Tesla vehicles are being involved in more accidents, even though crashes do end up being more publicised due to the company’s high profile, as well as greater scrutiny being placed on its semi-autonomous Autopilot and Full Self Driving functions.

Instead, the cars are being totalled due to high labour rates at repair shops, likely due to the increased expense of fixing an electric vehicle, especially through costly battery replacements. In addition, the Model S and Model X are made from aluminium (which is more difficult to repair than steel), which could be another factor that drives up repair costs. It should be noted that labour costs in the US may be higher than what they are in Malaysia, so what constitutes as a total loss there might not be applicable here.

The high repair costs and insurance premiums were what spurred Tesla to set up Tesla Insurance in 2019. The company promised 20% lower premiums compared to rivals, later basing them on a “safety score” determined by tracking real-time driving behaviour, including how often collision warnings were triggered.

Last year, Reuters reported on issues faced by Tesla Insurance customers, including long waits for repairs and payouts and high premiums due to false collision warnings. Earlier this week, it was revealed that Tesla hired longtime Geico exec Allen Laben to help drive down premiums, according to Electrek.

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Jonathan Lee

After trying to pursue a career in product design, Jonathan Lee decided to make the sideways jump into the world of car journalism instead. He therefore appreciates the aesthetic appeal of a car, but for him, the driving experience is still second to none.



  • DonkeyKong on Jun 06, 2024 at 1:03 pm

    Current-generation EVs are disposable cars with short lifespan, just like consumer electronics. What a sham.

    Like or Dislike: Thumb up 12 Thumb down 1
    • Pro-Palestine on Jun 07, 2024 at 9:37 am

      Short life span? The only thing short here is your vision. Lol. EV cars has the least part that can break down unlike ICE cars. Tak ada masalah leaking minyak, overheating, gearbox rosak, alternator rosak, macam macam sensor rosak, CAT sumbat, Mass air flow rosak, spark plug dan coil rosak, gasket letup…EV have none of those. EV will last way longer with zero headache

      Like or Dislike: Thumb up 1 Thumb down 5
      • DonkeyKong on Jun 11, 2024 at 8:46 am

        Org bodoh memang senang kena tipu. EVs have even more things going wrong because they’re laden with sensors and lack mechanical connections for basic things like door locks and window controls. Minor software and sensor issues, and the doors can’t open or the windows don’t work. Same goes for the powertrain and charging system. Snesor fault or software issue, and the vehicle won’t charge or it won’t move. Thousands of cases worldwide and tens of thousands of cases in China, but EV fanboys choose to ignore these..

        Like or Dislike: Thumb up 1 Thumb down 0
  • Maha kaya on Jun 06, 2024 at 1:38 pm

    What’s wrong with total loss? Just pay me the agreed insured value and I’ll get another car

    Like or Dislike: Thumb up 5 Thumb down 3
    • 4GR-FSE on Jun 06, 2024 at 3:50 pm

      Its not the matter of claiming total loss, the issue is higher insurance premium for EV cars than ICE cars.

      Like or Dislike: Thumb up 4 Thumb down 0
  • Bieight on Jun 06, 2024 at 2:20 pm

    Here even the car split into half also can be repaired back and drive on the road…

    Like or Dislike: Thumb up 2 Thumb down 0
  • paanjang16 on Jun 06, 2024 at 9:50 pm

    Tesla like Apple. Anti-repair and pakai buang. Like Iphone when spoil throw away and get new one. That’s why Apple surrender making an Apple car since Tesla is more Apple than Apple.

    Like or Dislike: Thumb up 2 Thumb down 0
  • Bossku on Jun 07, 2024 at 7:46 am

    Battery Toy Cars!

    Like or Dislike: Thumb up 1 Thumb down 0
  • gstrnui on Jun 07, 2024 at 11:36 am

    You can send it to Mat Armstrong with one T.

    Like or Dislike: Thumb up 1 Thumb down 0
  • Sohai on Jun 14, 2024 at 5:49 pm

    Macam jam tangan lah. Yang pakai batteri, buang je kalo rosak. manual winding boleh repair.

    Like or Dislike: Thumb up 0 Thumb down 0

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