These days, it’s hardly surprising to hear that a company led by Elon Musk makes lofty promises, places significant demands on its employees, and disappoints its customers. The latest example of this recurring pattern is Tesla Insurance.
Launched in 2019 in response to owners’ complaints about the lack of affordable coverage options due to high repair costs of Tesla vehicles, the company was introduced with Musk’s promise to transform the nightmare of claim resolution into a dream. At the time, Musk hailed the auto insurer his company launched as ‘revolutionary’ and ‘vastly better’ to other carriers.
However, as a new investigation by Reuters reveals, this promise hasn’t materialized. Tesla Insurance faces a steady stream of complaints on social media and in forum posts and is a frequent cause for concern among consumers who reach out to the Better Business Bureau (BBB).
Read: Tesla Wins Repair Monopoly Lawsuit, Customers Left Facing High Costs And Long Wait Times
Moreover, the Ohio Department of Insurance determined that Tesla violated its regulations in handling claims twice this year. The cause of the contraventions? How long it took the company to communicate with a policyholder. The department has considered opening a formal investigation into the matter.
Complaints from across the country, both formal and informal, all revolve around that same problem. Policyholders say they can’t reach insurance adjusters to make or resolve claims. Tesla owners who spoke to Reuters said they waited months for responses from adjusters, calling, emailing, and trying to use the Tesla Insurance phone app, whose propensity for freezing and crashing has turned Musk’s dream into a new nightmare of his own making.
Many disgruntled consumers
Reuters’ report features numerous instances of disgruntled customers. For instance, Phil Fioresi Sr. from California shared his experience, revealing that it took around 15 phone calls to eventually reach a representative at Tesla Insurance when his daughter’s vehicle was involved in a collision with one of the company’s policyholders in September. “What do they have, three people answering phone calls?” he asked.
Earlier this year, Mark Bova purchased a used Tesla Model S along with Tesla insurance, which he considered ‘really reasonable’ at $93 per month. After a crash involving Autopilot, where he hit a median, flipped the car, and had to escape through the window, leading to hospitalization, he waited seven months for a payout and still hasn’t been reimbursed for $50,000 in medical expenses. “I’m a former Green Beret,” Bova told the news site, referring to the U.S. Army Special Forces. “That was probably the second-most traumatic thing I’ve gone through other than being in combat.”
Understaffed and overworked employees
A lack of staff is at the heart of the company’s failings. Unnamed people familiar with the company said that, at first, the company hired only a dozen or so insurance adjusters, who were tasked with handling all of California’s policyholders.
They were soon inundated with work, sometimes receiving 24 or more claims per day. Unable to handle them all, backlogs started to mount. At the same time, Tesla Insurance’s buggy app meant that the adjusters also had to field calls from customers — something other insurance companies hire call centers to handle.
Not only did that interrupt their workflow, causing backlogs to grow, it also meant that customers had to wait hours — sometimes while stuck on the side of the road — in order to speak to a representative. Since the adjusters had no way of knowing how long a customer had been on the phone, they sometimes picked up the phone to speak to someone who was furious.
Since then, the company has tried to hire more adjusters, but it has been slow-going due to retention issues. In the meantime, overwhelmed adjusters have failed to live up to customer expectations, providing inadequate compensation, and making some customers wait months to resolve claims.
That has left a number of customers who made claims unwilling to deal with Tesla Insurance. Some say they’re now willing to pay for traditional insurance no matter how much more it costs.
Neither Tesla nor Musk responded to Reuters’s questions for their report.
