Happy National Teen Driver Safety Week for those who celebrate.
ChatGPT says that an American family with two cars can expect to pay an additional $3,250/year for car insurance when a household 16-year-old gets his/her/zir/their license (“Often doubling the premium if the base policy was modest”).
I typically think that the insurance market makes sense, e.g., in COVID-19 is sure to kill you, but life insurance rates haven’t changed and Life insurance and Covid we looked at (a) the government telling us that COVID-19 was killing healthy young people, and (b) unchanged life insurance rates for anyone who was eligible for life insurance (i.e., not ancient with one foot in the grave).
For a Tesla that does 96% of its miles on FSD, however, I’m struggling to understand how a teen “driver” adds risk. If anything, a teen should have better reflexes for reacting to a misstep by the FSD software. If the primary driver of the Tesla is the robot, then there is no reason to price insurance for the robot engaging in riskier behavior when the teen is in the car rather than a prudent adult.
Maybe there should be a special Tesla+Teen insurance policy that charges adult rates if the car is at least 95% on FSD and never in a driving mode faster than “Standard”:
On the back of a Jeep Liberty in a strip mall near us:
Update from our AI Overlord: “Florida already has a statute specifically authorizing this kind of discount. The most useful finding is Florida Statutes § 627.0653(6). “The Office of Insurance Regulation may approve a premium discount”. This language was added in 2019. … Florida § 627.0651(6)–(8) specifically allows different rates reflecting differences in expected losses and expenses. It also permits group-based rates when supported by credible actuarial evidence. … California is more restrictive about the rating factors an insurer may use.”
Sounds like there are thousand dollar bills on the ground. You have Elon on speed dial, don’t you?
Mitch: You raise a good point. For someone like me who worships at the Church of Markets are Usually Right, it is tough to understand how all of the insurance companies put together can be wrong about this. On the third hand, insurance is heavily regulated by our wise state governments. Maybe there is no regulatory framework that would allow a state-regulated insurance company to charge radically different rates… and ChatGPT says that I’m wrong (as usual): “Florida law expressly allows regulators to approve insurance discounts for vehicles equipped with automated driving technology.”
(If I did have Elon on speed dial, I would be calling him every day to demand a self-driving minivan with sliding doors and Tesla-engineered bicycle holders (some combination of roof and rear).)