Tesla’s Musk Tweets Off on California Regulator Lara Over Car Insurance
Tesla founder and CEO Elon Musk thinks California Insurance Commissioner Ricardo Lara is responsible for high auto insurance rates in the state because the state does not permit consideration of its data from its auto technologies in pricing.
Lara says he is simply enforcing the state’s Proposition 103 consumer privacy law that limits access to consumer data.
Musk says Lara should be voted out of office.
Lara says what Musk wants is unfair.
Here is how the tiff played out.
It began when Musk talked about Tesla Insurance during his fourth quarter earnings call.
Tesla offers its own insurance that incorporates technology that measures driving habits and provides real-time feedback to drivers. The company says it has data showing that the feedback drivers receive through the technology leads to safer driving. The Tesla telematics coverage can be bought in Arizona, Illinois, Ohio and Texas. Tesla also sells insurance in California but it excludes the telematics benefit. Musk mentioned how he’d like California to change that.
“It should be clear, like we are pushing very hard for California to change the rules to allow informatics, which basically means that you’re as safe as you’re driving is measured,” Musk said during the call, according to a transcript by SeekingAlphga. “So, I think the current California rules are contrary to the best interest of the consumers in California and should be changed.”
Lara saw that and tweeted a response that defended California’s stance as fair to consumers and in keeping with the state’s privacy laws that limit use of personal information.
Then Lara explained his agency’s position:
The Department of Insurance continues to uphold and implement the consumer protections set forth in voter-enacted Proposition 103 & since 2009 we have allowed vehicle data only to determine actual miles driven, and only in a way that protects the driver’s privacy. (2/2)
— Ricardo Lara (@ICRicardoLara) January 27, 2022
Musk saw that and shot back that Lara is thus responsible for high auto insurance rates in California.
Jan 27 Replying to @ICRicardoLara
Your policies are directly responsible for the outrageously high insurance premiums paid by Californians.
Then Musk took another shot at Lara:
You should be voted out of office
4:12 PM · Jan 27, 2022·Twitter for iPhone
According to an analysis by ValuePenguin of average auto insurance rates by state, California ranks about midway in costs.
Lara, a Democrat, faces several challengers in the June primary race to keep his office.
Opponents who have filed to run for the office include Assemblyman Marc Levine, a long serving and well-known Democrat state lawmaker. Other candidates who have filed to run for the office are Dr. Eugene Allen, Teri Barnes, Veronika Fimbres, and Lara.
Lara in his time in office has been an outspoken consumer advocate, facing off against insurers on rates on several occasions. He’s also had some speedbumps, including a lawsuit by Consumer Watchdog over a “a pay-to-play scandal” seeking records of Lara’s meetings and communications with insurance companies.
The records relate to $54,300 in campaign contributions Lara received from individuals linked to two insurance companies, Applied Underwriters and Independence Holding Co., after Lara pledged not to take contributions from companies regulated by the CDI.
A Lara spokesman reached out for comment explained that Lara’s Tweet’s were intended to highlight the state’s stance on protecting consumers.
“The Commissioner’s tweet was meant to shed light on California’s consumer protections. Nothing to add,” the spokesman replied to a query.
Lara referred to Prop 103. Passed by California voters in November 1988, Prop 103 requires prior approval from the California’s Department of Insurance before insurers can implement property/casualty insurance rates.
Proposition 103 requires insurers to base premiums primarily upon factors within a driver’s control, limiting rating factors. Under 103, auto insurance premiums must be based primarily upon 1) driving safety record; 2) the number of miles driven each year; 3) years of driving experience.