ABAT wary about Tesla Insurance coming to TexasBy on
Associations | Business Practices | Collision Repair | Insurance | Market Trends
Elon Musk is ready for his Tesla Insurance to blast off.
Next stop: the Lone Star State.
But Tesla’s founder might not receive a Texas-sized welcome from the state’s collision repair industry.
Musk, whose Tesla Insurance currently is available only in California, tweeted his intention to move it into Texas just two weeks ago.
But this has been in the works for quite a while.
Ben Gonzalez of the Texas Department of Insurance (TDI) said his office already has approved all the forms received from Redpoint County Mutual, an insurance company for which Tesla has been appointed as the managing general agent. Therefore, Redpoint County Mutual, located in Austin, Texas’ capitol city, will be able to sell Tesla Insurance.
Some of the forms TDI received from Redpoint County Mutual were filed last year and others earlier this year.
“We’ve reviewed those forms like we would any others and those have been put into action,” Gonzalez said.
That’s no surprise to Burl Richards, the president of the Auto Body Association of Texas (ABAT) who said he has never heard of Redpoint County Mutual.
“I’d be curious to know if TDI ever rejects anybody,” said Richards, whose Burl’s Collision Center in Henderson is Tesla certified. “Believe me, I’ve had a lot of communications with TDI and I’ve got some ongoing right now and I’m just going to be honest about it … I’ve had meetings with TDI personally in Austin. I’ve had meetings with the commissioner of TDI and … let me put it this way, it’s very demoralizing.
“Just because they approved it, from my perspective, whoop-de-do. I’m not shocked.”
ABAT Executive Director Jill Tuggle said her association has had “its thumb on the pulse” of Tesla since it moved its headquarters to Austin from California in 2020 because Musk didn’t like his company’s treatment in that state.
ABAT hosted a tradeshow last week, but Tuggle said studying up on Tesla Insurance is “next on my list.”
“Right now we’re kind of in the research phases,” Tuggle said. “I’ve been really focused on our trade show, but my next priority is to kind of start looking into this a little bit more so that if we need to take legislative action or talk to the (Texas) Department of Insurance or talk to our attorney general, we can start,” Tuggle said.
Richards said he has as little confidence in the Texas attorney general’s office as he does in TDI.
Richards doesn’t yet know a lot about Tesla Insurance, but his main concern about its expansion into Texas comes from a letter he received as a Tesla-certified shop owner about a year and a half ago.
The automaker has long been concerned about steep insurance rates for what are classified as its luxury cars.
“[The letter] said that they were going to pay us a lesser rate, and I wasn’t OK with that,” Richards said. “I don’t understand how you can expect a shop to give superior service and invest in all that training and certification and then tell somebody, ‘Hey, we’re going to pay you the same thing that an insurance company would pay to fix a Kia or a Hyundai.’
“My posted rate, I don’t charge any more to repair a Tesla than I do any other vehicle, but the letter I got said they wanted me to charge less.
“And I have a problem with that.”
So do the shop owners of other Tesla-certified collision repair shops in Texas, he said.
“I know some shops that although they’ve invested in the equipment and training, they’re just going to bow out,” Richards said.
“For me, it’s a wait and see game. At the end of the day, let’s hope that [Tesla Insurance will pay] for all the necessary processes and procedures that they recommend, No. 1, but No. 2, let’s see what they want to do with the labor rates, too.”
Richards insists he’s not picking on Tesla.
“Look, as long as an insurance company will pay for all the necessary processes and procedures to indemnity the insured or claimant, I don’t care who the insurance company is,” he said.
“And I don’t want to sit here and sound like I’m bashing on Tesla, because I’m not. It’s like anybody else, any other car manufacturer, nobody’s perfect. They built a really, really awesome vehicle. And we’re proud of the fact that we’re certified and can repair them.
“But if they’re going to be in the insurance business just like any other insurance company, they’re the bill payers.
“They shouldn’t be dictating what rates are being paid when it comes to repairing that vehicle.”
Featured image: Auto Body Association of Texas logo (ABAT)
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