How Tesla Insurance Could Work

Photo by Roberto Nickson on Unsplash

It is simple, really…More Autopilot = Less Accidents

Most commentary [pay wall] about Tesla’s new insurance point to the data that the company can gather from customers’ cars, an idea pioneered by other insurance companies like Progressive and Metromile. Could Tesla know even more? Of course. They probably can not, however, improve dramatically on other insurance companies who have been measuring car data for over a decade. Also, personal insurance is often limited by states like California in how they can use that data. There will be some information, like video from cameras, that should make it easier to identify who is at fault, which would be a minor advantage. Claims adjustment is a minor cost for an insurance program.

Everyone, however, is missing a basic insight. As Tesla cars become more autonomous, they will get in fewer, and more minor accidents. That is a big deal. The biggest costs in insurance are collisions, especially major ones, and especially the ones involving injury and death. This is an advantage that Progressive et al will never have unless they join with an autonomous car company.

There is more to the story. As more people use autopilot for more and more miles, the liability for those miles is going to accrue mostly to Tesla, not the driver. Just like anti-lock brakes and other safety equipment, the maker of autonomous features will be liable in case it doesn’t perform properly. Less liability for the driver means less liability for their insurance company.

It all adds up to declining risk for the insurance company that stands behind the driver. It does, however, mean more risk for Tesla shareholders, but if I’m Tesla, I might as well get a benefit from that that additional risk. Tesla Motors can offer it’s customers cheaper insurance while Tesla Insurance can profit from declining claims.

Oh, and perhaps another bonus to having Tesla Insurance. Guess who often pays for the lawsuit when there is a dispute between the driver and the automobile company? Yup, the insurance company. There might be legal limits on how cozy that relationship can be (and if there aren’t there should be). Even with regulation, though, it seems inevitable that Tesla Insurance will be biased against bringing suit against Tesla Motors.

I’m a bit surprised that most observers don’t get the obvious connection. This is likely a fruitful direction for Tesla and it plays to their focus on autonomy.

About the author, Sunil Paul. He was co-founder and CEO of the company that invented ridesharing (Sidecar), helped incubate Getaround at Singularity University, sponsored the first law to protect peer-to-peer car sharing, and was on the board of one of the first car sharing projects. Disclosure: I own a small amount of Tesla stock, which is not material to my net worth.

Gratitude Chain

Can we bring spiritual beauty to the internet?

I have an idea that I’m working on. It is inspired by my daily gratitude practice. Every day I think of three things I’m grateful for. I do it in the morning when I plan my day and most evenings after I get in bed. I often write them down.

I thought, “what if there were a way to preserve gratitude?” I realize that prayer serves this function for many. It is a way to have gratitude and hopes sent out to a supreme power, hopefully to be acted on, but at minimum to be listened to and accepted in an eternal way. What if there was a way to preserve gratitude and hopes with the cooperation of humanity.

New technology, specifically peer-to-peer and blockchain, can do this. With these technologies, we can create immutable records. And those permanent records don’t depend on the whims of Facebook or whether your hard disk is backed up. It really just comes down to whether other people are willing to help keep your data.

Gratitude chain is a new way to practice gratitude that uses the immutability of a blockchain to allow expression of gratitude and hope to last forever.

Gratitude has been shown in many studies to be one of the most effective ways to improve a sense of well being. By making it easy and fulfilling to build a gratitude habit, Gratitude chain aims to improve human well being.

For millennia humans have expressed their gratitude and hopes to deities with the expectation that their feelings will be heard, preserved, and hopefully acted upon. Science teaches that these feelings have the power to improve the experience for the people who practice gratitude, regardless of whether they believe in a supernatural diety.

Today’s blockchain technology allows us to create a human-driven way for our gratitude, hopes, and prayers to be cultivated and preserved.

Gratitude chain is a practice of collaboration with the rest of humanity to perpetuate and preserve gratitude and hopes of the world.

I think it is a beautiful idea. The question is whether we can both make it real and make it genuinely useful.