Some Tesla owners may see their insurance cost surge 30% (TSLA)

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June 5, 2017 9:54 PM

Insurance provider AAA plans to raise rates on Tesla vehicles after seeing high claim rates for the Model S and Model X.

The Tesla Model S.

Some Tesla owners are about to see a hike in their insurance rates.

US insurance provider AAA plans to raise its rates after seeing a high number of claim frequencies among Model S and Model X owners, Automotive News first reported. Premiums could surge as high as 30%, AAA told Automotive News.

AAA based its analysis off of data provided from the Highway Loss Data Institute (HLDI), as well as other sources.

The HLDI conducts studies for the Insurance Institute for Highway Safety, a nonprofit dedicated to reducing crashes.

The report by the HLDI divided 2014-16 vehicles by size, weight, and competing models. It compared the Model S and Model X to vehicles like the Volvo XC70, Mercedes-Benz E-Class, and Maserati Ghibli.

"Teslas get into a lot of crashes and they're expensive to repair," Russ Rader, the spokesperson for the Insurance Institute for Highway Safety, told Business Insider. "The rates aren't abnormally high. They're to be expected based on results for competitors."

A Tesla spokesperson, however, told Business Insider that the HLDI's analysis is "severely flawed" because it neglects to compare the Model S and Model X to its real peers:

The AAA did not return Business Insider's request for comment.

AAA's decision comes at a time where other insurance companies are preparing to reduce premiums for Tesla owners as the cars get safer with self-driving technology.

A government report found that crash rates for Tesla vehicles have dropped 40% since Autopilot was first installed.

Farmers Insurance has expressed an interest in adjusting its insurance prices to account for Tesla cars getting safer with Autopilot technology.

Tesla itself is advocating that insurance rates should fall for its cars. In fact, Tesla is selling car insurance with its vehicles in Australia and Hong Kong as part of an overall vision to one day include insurance in the final price of all its cars.

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