Tesla Y LR: no accident & no change but Geico premium up 40% Jan. 23 to Jun. 23 in CA

[frog8]

California resident, I replaced my luxury sedan mid-2022 with a Tesla Y LR. I got several quotes for insurance, all about the same and typically 40% more than the premium for the sedan of similar value. I kept GEICO because I have been a long term customer. I insure 3 vehicles with GEICO with payments twice a year on January 1 and July 1.
I just receive the July 1, 2023 invoice, and it shows an increase (when compared to Jan. 1 2023) of 15 % for each of the 2 gas vehicles, but a staggering 40% increase for the electrical car ! This means that I have to pay about $1,000 more per year. I called GEICO and they talk about the 'cost of living', 'cost of Tesla repair', etc. without telling me why the premium went up so much. They have zero visibility in the increase and blame the algorithm; there is 'nothing they can do about it'.
Note that nothing changed in my policy: no new driver, no accident and no ticket. I just got older, but GEICO told me that this is not the issue ... then blurted out that they slam drivers when they reach 60; I know that because it happened to me 3 years ago when I reached that 'milestone' and got a 30% premium increase without explanation.

In December 2022, GEICO and State Farm agreed to limit their increase in California to 6.9%, but this does no seem to apply to my policy.
I heard about 'bait and switch' tactics in the insurance policy: do any of the TMC have similar experience with GEICO or State Farm ?

 

[whisperingshad]

I ditched Geico when they wanted insane rate for my Model Y.

 

[whisperingshad]

My Wawanesa went up 100 per 6 months on my tesla in March though.

 

[frog8]

According to the California Insurance Code, the customer has the right to be informed of the reasons for any increase in premium.
When asked for more details about the algorithm, GEICO cites two documents (authored by 'GEICO Underwriting Department') mailed with most invoices: [1] ‘Limits of Future Coverage’ document M348 and [2] ‘Rate Class Explanation’ document U350CA. Document 2 lists five 'rating classes': [1] 1st position is driver accidents [2] 2nd vehicle usage [3] 3rd is driver experience [4] 4th is driver gender and marital status [5] is vehicle yearly miles. I will be happy to post these documents that are public domain.
I carefully reviewed these documents, and cannot find any reason for the 40% premium increase: there was not a single change in my policy.

 

[glide]

I carefully reviewed these documents, and cannot find any reason for the 40% premium increase: there was not a single change in my policy.

I can tell you the reason. All the smash and grabs have an impact on premiums. It has nothing to do with *your* policy. There is simply more risk for the carrier to insure that particular vehicle in your state.

 

[frog8]

Re 'I can tell you the reason", I have to disagree. 'Smash & Grab' affects all cars, but premiums on the gas cars 'only' went up by 15% while the Tesla's was increased by 40%. I was already paying a hefty 'Tesla surcharge' on 'Tesla Tax' on the electric car, as its premium (based on the $55K value) was already 50% more that the premium of the $75K sedan it replaced. The excuse was that 'Tesla repairs are very expensive'.
One of the reasons of these wild premium increases is that the insurance companies made a lot of money during the pandemic when people were not driving, but bought market share and bought back shares (for the profit of the biggest shareholders) instead of conserving cash. Now -with the return of driving- the insurance companies, and especially GEICO, are in a deep hole and brutally increase the premiums; the favorite target seems to be Tesla owners 'that can pay'.

 

[jjrandorin]

Re 'I can tell you the reason", I have to disagree. 'Smash & Grab' affects all cars, but premiums on the gas cars 'only' went up by 15% while the Tesla's was increased by 40%. I was already paying a hefty 'Tesla surcharge' on 'Tesla Tax' on the electric car, as its premium (based on the $55K value) was already 50% more that the premium of the $75K sedan it replaced. The excuse was that 'Tesla repairs are very expensive'.
One of the reasons of these wild premium increases is that the insurance companies made a lot of money during the pandemic when people were not driving, but bought market share and bought back shares (for the profit of the biggest shareholders) instead of conserving cash. Now -with the return of driving- the insurance companies, and especially GEICO, are in a deep hole and brutally increase the premiums; the favorite target seems to be Tesla owners 'that can pay'.

They dont want to insure Teslas. They cant tell you no, all they can do is change rates. Shop around.

 

[glide]

Re 'I can tell you the reason", I have to disagree. 'Smash & Grab' affects all cars, but premiums on the gas cars 'only' went up by 15% while the Tesla's was increased by 40%. I was already paying a hefty 'Tesla surcharge' on 'Tesla Tax' on the electric car, as its premium (based on the $55K value) was already 50% more that the premium of the $75K sedan it replaced. The excuse was that 'Tesla repairs are very expensive'.
One of the reasons of these wild premium increases is that the insurance companies made a lot of money during the pandemic when people were not driving, but bought market share and bought back shares (for the profit of the biggest shareholders) instead of conserving cash. Now -with the return of driving- the insurance companies, and especially GEICO, are in a deep hole and brutally increase the premiums; the favorite target seems to be Tesla owners 'that can pay'.

If you know the answer, why are you asking the question?

Tesla’s get broken into frequently and are very costly to repair if they are in an accident.

It’s not a conspiracy. Insurance carriers need to mitigate their risk.

 

[frog8]

Re 'Insurance carriers need to mitigate their risk'. I disagree: while the insurance outflow for accident/repair seem to have increased by 8% to 10%, most of the premium increases IMHO might be due to the disastrous financial games played by the insurance companies that buy small independent companies to gain market share and buy back common stocks.

GEICO is owned by Berkshire Hathaway (BRK) (NYSE:BRK.A & NYSE:BRK.B).
In 2020, GEICO profits were +$3.43B. In 2021, GEICO profits were +$1.26B. This is +$4.69B in profits ! Then BRK bought back $2.6B of common stocks for the benefits of the large investors. Following year in 2022, GEICO lost -$1.88B, and Warren Buffet's protege, Todd Combs -an investment manager at BRK- became GEICO CEO. To rein-in the deficit, GEICO cut the add (remember the green lizard?) and 'employees costs !' from $5.45B down to $4.57B. This was not enough, so here come the premium wild increases !

 

[jjrandorin]

I am not sure what you are after here... No amount of complaining here (or anywhere else online) is going to change geico's quote to you, and what their profits are or arent is also not going to change their quote to you. Find another company that wants your business.

 

[frog8]

Re 'I am not sure what you are after here', I agree: my ranting about the insurance companies' financial reckless games do not belong to the Tesla world, and I apologize to the community.
But IMHO what belongs here are the facts that Tesla owners seem to be singled out by [1] the 'Tesla Tax' i.e. the 50% surcharge for that car as compared to more valuable gas cars [2] the brutal 40% premium increase for a Tesla while premium of the gas cars were 'only' raised by 15%.

 

[glide]

Re 'Insurance carriers need to mitigate their risk'. I disagree: while the insurance outflow for accident/repair seem to have increased by 8% to 10%, most of the premium increases IMHO might be due to the disastrous financial games played by the insurance companies that buy small independent companies to gain market share and buy back common stocks.

GEICO is owned by Berkshire Hathaway (BRK) (NYSE:BRK.A & NYSE:BRK.B).
In 2020, GEICO profits were +$3.43B. In 2021, GEICO profits were +$1.26B. This is +$4.69B in profits ! Then BRK bought back $2.6B of common stocks for the benefits of the large investors. Following year in 2022, GEICO lost -$1.88B, and Warren Buffet's protege, Todd Combs -an investment manager at BRK- became GEICO CEO. To rein-in the deficit, GEICO cut the add (remember the green lizard?) and 'employees costs !' from $5.45B down to $4.57B. This was not enough, so here come the premium wild increases !

You’re right. It’s a conspiracy. Against you, personally. That’s why your rates went up.

 

[Cabelaman]

If you are a Costco member check out their auto insurance. I did, it saved me $500/6 months compared to my Allstate Policy. However I live in PA and I saw another thread that Costco is not accepting new auto insurance policies in California.

 

[frog8]

Thanks for the suggestion. Costco insurance is actually through 'Connect' ex 'American Family Insurance". Unfortunately, Costco does not offer new policies in California. Quote from Costco web site: "Important Information for California Costco Members. New auto and home insurance policies are currently not available in California through the Costco Insurance Agency, Inc."

 

[Unclepaul]

Many people seeing similar increases on their homeowners insurance.

 

[kpanda17]

Think the insurance industry is shocked by the collision repair costs of evs
a friend backed in to the crash pole in front of a supercharger and the repair was $12k
vs my guess if it was ice, $6k
this might be due to limited skill in the repair snd higher labor costs, no third party parts yet/diretc manuf parts cost more, sensors and camera in repaired area add to the cost

 

[K.A.I]

Have you considered switching to Tesla Insurance?

 

[kpanda17]

For me T insurance is not in NY yet