One of the world’s largest insurance companies seemingly ended its coverage of the Tesla Inc TSLA Cybertruck, before a clarification averted tensions between two of the most valuable companies run by two of the richest people.
What Happened: According to a report from Torque News, Geico dropped the Tesla Cybertruck from its coverage.
Geico is owned by Warren Buffett‘s Berkshire Hathaway Inc BRKBRK.
Robert Stevenson, who owns a Cybertruck, shared on social media platform X that GEICO told him they can no longer insure his Cybertruck.
“It makes no sense, as there are other, riskier cars out there. Let me know if you recommend any insurer for the truck. I have eight cards with an amazing record. I will be canceling my entire Geico policy,” Stevenson tweeted.
Stevenson shared a letter from Geico, which appears to state that the Cybertruck insurance policy had been terminated.
“After a careful review of your policy records, we have determined that we are unable to continue your insurance coverage for the 2024 TESLA CYBERTRUCK,” the letter says.
The letter goes on to say that the Cybertruck “type of vehicle doesn’t meet our underwriting guidelines.”
The Cybertruck is unique for its eccentric, stainless steel design. It also has other features that make it stand out from other pickup trucks and electric vehicles (EVs).
Torque News lists several reasons why the Cybertruck could be riskier than other vehicles to insure, with the high cost and wait time perhaps the biggest issue.
A Geico spokesperson responded to The Verge and clarified that the company “has coverage available nationwide for the Tesla Cybertruck.”
Geico is third in U.S. vehicle automotive insurance market share (12.3%), according to the National Association of Insurance Commissioners. It trails State Farm (18.3%) and Progressive (15.2%)
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Why It’s Important: Geico’s comments and the fact that Stevenson’s tweet has been deleted could point to a potential misunderstanding, or that some facts were left out of the storyline.
Still, this isn’t the first time that Cybertruck owners have reported struggling with getting insurance policies for the electric pickup truck.
And while Buffett has butted heads with Tesla CEO Elon Musk in the past, the 94-year-old investor has also praised Musk in past interviews.
Speculation could continue that Geico is looking to minimize risk with Tesla vehicles in the future based on Buffett’s comments earlier this year at the annual Berkshire Hathaway shareholders meeting.
An investor of Tesla and Berkshire Hathaway asked Buffett about the risks of full self-driving (FSD) on insurance companies.
Buffett said that lower accident rates are good for society and could be bad for insurance companies based on volume.
“You know, good for society is what we’re looking for,” Buffett said.
The billionaire said that if accident rates decline, insurance policies could get cheaper for consumers.
Tesla began Cybertruck deliveries last November. Since then, the truck has become a staple of the Tesla EV lineup.
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Photo courtesy of Tesla.
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