Hunting for the cheapest car insurance deals has become a staple of owning a car but recent news from Elon Musk could change the game for good.

In May 2022 business magnate Elon Musk made the announcement that he intended to take motor policies for his electric vehicle (EV) company Tesla, in-house. The cover was launched in March 2022 and is currently available in eight US states.

Tesla will take their insurance policies in-house offering claims and underwriting service and a 60% discount on premiums. This announcement has thrown into question the future of vehicle insurance, particularly EV insurance.

Musk hopes to be able to offer cheaper insurance to his loyal Tesla customers and he has already made plans to roll out his exclusive Tesla policies to 80% of the US in time.

As of June 2022, Tesla’s net worth sits at around $728.88B with the company reporting a revenue of $18.8B in the first quarter of 2022. With these new in-house insurance policies, it will be interesting to see how much this new move will boost the companies further in the second half of the year.

Although this news could prove profitable for Tesla, it does come with its risks.

Chief Executive of By Miles highlighted that there are still “many difficulties with electric car repairs” and suggested that EV manufacturers should concentrate on solving these issues before diving into the world of insurance.

Electric Vehicle claims are still a fairly new landscape for insurers and claims could prove too complex for in-house insurers.

Broadway Chief Executive, Daniel Lloyd-John, described this potential move to in-house as “dangerous territory” and reiterated the Chief Executive of By Miles’s claim that “there is more work to do”.

However, there is no denying that Elon Musk has by far the most data on EVs, greatly supporting him in this new venture.

After this announcement, it will be intriguing to see if or how other vehicle manufacturers follow suit. There will also be a lot of questions being asked about how the insurance industry will keep up with these new developments in vehicle insurance.