Tesla is about to face a class action. A judge has accepted a lawsuit alleging the automaker overcharged people using its insurance with “real-time data,” after raising their premiums based on “false collision alerts.”
Tesla finds itself at the heart of a Collective actionjustice having refused to dismiss a complaint. She claims that the manufacturer would have applied excessive prices to users of its insurance using real-time data linked to fictitious collision alerts. The looming legal battle could have significant repercussions.
When launching its own auto insurance product, Tesla used its ability to collect data driving data in real time to create what it calls a “Safety Score,” giving drivers a rating based on how and when they drive, increasing or decreasing their monthly premium accordingly.
The motivation behind Tesla’s insurance model was to counter the high Tesla premiums imposed by third party insurers to Tesla vehicles. However, controversy has arisen regarding the factors influencing the Safety Score, particularly acceleration, night driving and collision warnings. The problem lies with Tesla’s Autopilot safety system, which sometimes issues collision warnings without apparent danger, leading to increase in monthly premiums for Tesla Insurance users.
Ricky Stephens, an Illinois resident and user of the much-maligned Tesla insurance, filed a lawsuit on behalf of all Tesla users. Tesla insuranceciting cases of “sporadic and random collision warnings when there is no danger in sight“. The complaint claims that these false collision alerts negatively impact the Safety Score, leading to higher premiums. Tesla tried to do cancel the complaintbut a California judge rejected the motionallowing the case to go to trial early next year.
The complaint alleges that Tesla’s insurance practices, influenced by collision warnings potentially inaccurate, lead to an unfair increase in premiums for policyholders. This legal challenge raises questions about thefairness and accuracy of Tesla’s Safety Score system, signaling potential repercussions for the company. As the case unfolds, it highlights the need for further examination of how emerging technologies interact with insurance practices and consumer protection.