Tesla’s Musk, Others Take Aim At California Law Restricting Telematics (S&P Global)

Tesla’s Musk, Others Take Aim At California Law Restricting Telematics

  Friday, January 28th, 2022 Source: S&P Global

A California law passed in the late 1980s originally meant to protect consumers is under increased scrutiny for restraining the use of telematics in auto insurance underwriting.

Tesla Inc. CEO Elon Musk joined a chorus of insurance industry participants criticizing Proposition 103, which, among other things, limits insurers’ use of data gathered by telematics technology.

The law is "contrary to the best interest of the consumers in California and should be changed," Musk said during a Jan. 26 earnings conference call.

Tesla, which has partnered with State National Insurance Co. Inc. to offer auto insurance coverage for the electric vehicles it produces, is "pushing very hard" for California to revise its laws governing the use of telematics, said Musk.

The 1988 law requires that private auto rates primarily be determined based on the insured’s driving record, experience and number of miles driven annually. But it effectively precludes carriers from employing more granular usage-based data that they now can obtain through telematics, such as hard braking, speeding and distracted driving.

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