Tesla Insurance is facing a load of legal issues in California. The state’s Department of Insurance alleges that the company has failed to comply with claims handling laws, causing harm to policyholders.
The Department of Insurance said Tesla insurance failed to respond to numerous warnings and meetings. It also accused the insurance company of having “egregious delays” in claims responses, causing significant expense and hardship for policyholders. Tesla Insurance also reportedly issued unreasonable claims denials and delayed paying valid claims, and the state department said Tesla did not alert customers to their right to have it review claims denials.
Tesla Insurance has 15 days to respond to the Department of Insurance’s claims, but if it’s found at fault, it could face fines of up to $5,000 for each violation or up to $10,000 for acts determined to be willful. The Department has also threatened to pull Tesla’s license to issue insurance in the state.
The Tesla insurance program tracks drivers’ behaviors and changes rates based on how they drive. The Tesla app generates a safety score based on the real-time driving data, which is then used to set rates, though California does not allow the safety score system to be used in rate setting practices.
[Images: Tesla]
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