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Comment by ams6110 | Hacker News Reader

Typically insurance would cover this anyway.

His point is that insurance cost for an 85k car with a potential design flaw is (1) likely to go up; and (2) likely to be perceived as a red flag by potential buyers. Insurance companies are often accused of over-reacting to recent data (eg, a recent hurricane will jump up insurance next year). That being said, the insurance companies are also likely to actually look at the data and dis-regard pr spin when they are on the hook for the damages. By removing the insurance co's scrutiny from the data as well, it kills two birds with a single stone.

You're right, I glanced over that part of the statement, and thought he was just trying to assure owners that they "are covered" in case their car bursts into flames.

Or at minimum an excuse for insurance companies to charge more. And Tesla keeping this insurance, at minimum, allows them to manage the costs for owners - and if there are 'profits' to the 'paid' insurance (embedded in cost of car, and the ecosystem as a whole), then it is Tesla that gains the benefits either as profit or can re-invest it into their ecosystem. Insurance overall is a scam, however government and politicians prefer to not be responsible or accountable by allowing private for-profit companies take advantage of everyone.

You should qualify that with "In the U.S., government and politicians..." My car insurance in Canada is public, and quite affordable($66 a month.)

My car insurance in Canada is not public and it is not affordable ($250/month with five years clean driving record) so you should perhaps qualify your statement as well. :)

Qualify it with what? It already is a specific case... MY car insurance.

That logic makes sense if you assume the only incidents are single-car. When this happens near other cars and is deemed to be the factor behind a multi-car accident, the insurance company still has to pay out for the other participants (unless you are in a no-fault state). I would argue that, regardless of the PR spin and warranties, unless Tesla takes liability for entire accidents I would expect insurance rates to skyrocket

Why? Insurance companies are looking at the data and would easily find the 1/5 as likely to be in a vehicle fire bullet point.

> "Insurance companies are often accused of over-reacting to recent data (eg, a recent hurricane will jump up insurance next year). That being said, the insurance companies are also likely to actually look at the data and dis-regard pr spin when they are on the hook for the damages."

Could the surge in prices after a recent hurricane be the insurance company 'cashing in on'/exploiting the irrational reaction of the public, rather than the insurance company itself having an irrational reaction?

Insurance companies can only survive long term if they are data-driven, so it seems likely to me that they are reacting rationally (although perhaps coldly) to an irrational market reaction.

Competition should also help here. If InsCo A is trying to overprice coverage due to a recent disaster, InsCo B can undercut their price.

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