What Impact Will The Cost To Insure a $TSLA Have On New Sales?

During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed What Impact Will The Cost To Insure a $TSLA Have On New Sales? Here’s an excerpt from the episode:

Bill Brewster:
Yes. So first off, let’s start out with my Tesla story that I had to take down from Twitter. Thank you to TSLAQ, you’re all are crazy. My grandma, very nice lady, my kids are playing tennis across the street from her and she is not as able to walk as she once was. So she wanted to drive over to watch and she was pulling the Tesla out of the garage and I guess started with the rear bumper, didn’t totally realize that she was hitting the garage and pressed down on the gas a little bit all the way to the front driver’s side door, the side of the garage raked along the car.

Bill Brewster:
And then I think at some point she got a little bit I don’t know, confused, worried, whatever. And she cut the car to the other side and with the front right, hit another part of the garage. So long story short, nana, I hope you’re not listening. She’d be embarrassed that I’m telling this. I don’t think she listens. Hopefully she’s one of the 10 now. Anyway, I call up insurance and I’m like, “Hey this is what happened. And we got this quote. I would like to process this.” Anyway, long story short, the quote to fix the cosmetic damage, this is cosmetic, right? She hit a garage driving at slow speed. 25 grand of damage.

Tobias Carlisle:
It’s a few panels, right? How many panels? Back, right bumper?

Bill Brewster:
It was most of the driver’s side and the front right quarter panel. So I mean it’s not nothing to fix. Don’t get me wrong, but you’re not talking about structural stuff. It’s all cosmetic. Anyway, Kelley Blue Book value on the car was 31 grand. She was going to try to pay out of pocket because she didn’t want it on our insurance. And I was like, “No, this does not make any sense.” And the agreed upon value is 43 grand. So that’s what she’s going to get from the insurance company. To the person that may be listening that accused me of insurance fraud, you are a moron, sir. It’s not insurance fraud, it’s how insurance works. Next.

Tobias Carlisle:
So let’s just-

Jake Taylor:
Are there any-

Tobias Carlisle:
Sorry.

Jake Taylor:
… Tax credits you can get, EV tax credits to get a repair job?

Bill Brewster:
I don’t think the repair job, but it’s going to get another one. She’s very excited. We’re getting her the model three, the smaller version so that she can tool around in that. But it’s amazing how much that costs to fix on something that really doesn’t feel like it should cost that much. Montana Skeptic tweeted that out and that’s when my Twitter feed went from. “Oh, this is sort of a funny, cute story to I am going into the vortex of TSLAQ hell.” And I deleted it.

Tobias Carlisle:
So, what side were you cast on? Are you TSLAQ or are you, Tesla, whatever that is, Tesla?

Bill Brewster:
I mean I interact with Charlie Grant occasionally. Charlie is a great guy. If you’re listening, what’s up Charlie?

Tobias Carlisle:
He’s one of the 10.

Bill Brewster:
He’s obviously one of the 10.

Tobias Carlisle:
So is his dad.

Bill Brewster:
Jim, I don’t know. Maybe, I hope so.

Tobias Carlisle:
Jimmy comes in here for the [crosstalk 00:07:37].

Bill Brewster:
I don’t know. Charlie retweeted it and he sent me a DM, he was like, “Sorry I had to make you go viral.” And it was funny. I mean I shared it because I thought that the punchline of my joke was funny, but then once Skeptic got in. His followers are a little bit now, they’re looking for meat a little bit too much and I wasn’t trying to be their dinner. I’m just trying to share a story from my life.

Tobias Carlisle:
So basically, so what has happened is your grandma has backed out of the garage and it’s dinged up some side panels.

Bill Brewster:
Yeah, super slow.

Tobias Carlisle:
And then-

Bill Brewster:
I mean, I think she just got a little bit nervous, heard something scratching, hit the gas. That thing does have a ton of torque. It was a 2014 Model S and just started raking against the garage.

Tobias Carlisle:
But then they’ve treated the car as if it’s totaled.

Bill Brewster:
It is totaled.

Tobias Carlisle:
What does that mean? What does totaled mean? From an insurance perspective, as in it’s just cheap, it’s too expensive to fix it, we’ll just get you a new one or it’s not drivable?

Bill Brewster:
No, they’re going to send it to Copart who’s going to sell it as a salvage car. So my dad wants to buy it out. He got the auction lot number and he’s going to be their bidding on the car to try to fix it. But I mean it goes to auction and then somebody that has the body shop or something or thinks they can fix it, will fix it. So I mean-

Tobias Carlisle:
What’s the broader-

Bill Brewster:
… I don’t know if it’s that easy.

Tobias Carlisle:
What’s the broader takeaway for Tesla? What did you deduce from that?

Bill Brewster:
Well, what Montana Skeptic’s point was if this is the outcome from a fairly small incident, how are these things insurable down the road? And I do think that’s a legitimate question to ask long-term.

Tobias Carlisle:
They’ve had some trouble insuring the cars. I’ve had some trouble insuring the board too. But let’s just talk about the cars for a moment.

Bill Brewster:
Oh, we got jokes early. I like it. Yeah, I don’t know. I mean it pulls forward some demand in the short-term, but if you can’t get insurance for the car, it becomes a problem down the road.

Tobias Carlisle:
Does Tesla make money out of that because they get another car being bought from them? That’s the insurance company’s issue, not Tesla’s.

Jake Taylor:
Yeah. Well its Tesla’s issue when your total cost of ownership goes up so much because your insurance that then there isn’t demand for your product.

Bill Brewster:
Yeah, that’s right. I mean that’s the one thing that made me a little bit nervous. I mean this really, if I even showed you the pictures, you guys would be like, there’s no way that car is totaled. But it was.

Tobias Carlisle:
Who makes the determination? Tesla or was a Tesla certified repair shop that does then?

Bill Brewster:
It’s a Tesla certified repair shop.

Tobias Carlisle:
So it’s an independent third party, right?

Bill Brewster:
Or Tesla. Correct.

Jake Taylor:
The insurance company makes the total decision or not.

Bill Brewster:
Correct. Yeah, she’s insured through Chubb. I contacted Chubb. Chubb knows the repair shop. They talked and then the Chubb whatever, adjuster or whatever called me up and he was like, “Are you sitting down?” And I said, “Why?” And he’s like, “The car is totaled.” I’m like, “What the hell?”

Tobias Carlisle:
What’s your job? “I’m a Chubb adjuster.”

Bill Brewster:
[crosstalk 00:10:53] total loss.

Jake Taylor:
Crazy.

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