On Sunday night, the Internet was aflutter with a scurrilous rumor. GEICO had blacklisted the proud Tesla Cybertruck, and owners would be left scrambling for insurance coverage elsewhere. Understandably, this would be unwelcome news to many a Cybertruck owner. However, it appears that GEICO will continue to insure Cybertrucks.
The story comes to us via Torque News. The outlet reported on the case of one Robert Stevenson, a Cybertruck owner who was, up until recently, insured with GEICO. Robert had apparently taken to Twitter to complain that the company had recently informed him that it could no longer insure his Cybertruck. The post has since been deleted but is preserved in a post on Reddit’s r/CyberStuck community.
Robert’s post indicated he had a full 8 cars insured with GEICO, with an “amazing” driving record. And yet, he had a letter from the insurer stating that his insurance would not be continued. Why? GEICO apparently stated that the truck “doesn’t meet our underwriting guidelines.” Let’s examine what’s going on.
Apparently Geico car insurance in no longer insuring Cybertrucks because this type of vehicle doesn’t meet our underwriting guidelines
byu/godzilla19821982 inCyberStuck
What Is The Gecko Doing?
This isn’t the first time we’ve heard chatter about GEICO and the Cybertruck. The same story popped up in August with one New York owner saying they’d been cut by the lizard-themed insurer. Another from the Cybertruck Owners Club forum reported a similar experience in Georgia back in June.
The common theory is that GEICO has placed the Cybertruck on some kind of “do not insure” list, and is cancelling existing policies. As for why, high repair costs and/or a lack of spare parts could be to blame.
Meanwhile, others have suggested it could be an attempt to push owners into taking out a commercial vehicle policy instead. One owner posted on the forum on Sunday that they had received a cancellation letter from GEICO, which instructed them to consider obtaining a quote through GEICO’s Commercial Auto arm instead—stating that it could be because their DMV considers the Cybertruck a commercial vehicle.
The question is—has GEICO actually put the Cybertruck on some sort of blacklist? Or is it only canceling the policies of some owners for specific reasons?
GEICO Says It Will Insure The Cybertruck
A spokesperson for GEICO told The Autopian that “GEICO has coverage available nationwide for the Tesla Cybertruck.”
To double-check that, I went to GEICO’s website and found out it will still allow you to run a quote for a Cybertruck. I was able to get a figure of $583.92 a month for an unmarried Cybertruck owner living in Hermosa Beach, California, driving roughly 15,000 miles a year. However, that’s not rock-solid proof. I didn’t purchase the policy, after all. I was also able to get a quote for New York, too.
Why, Though?
Insurance companies do cancel various types of policy from time to time. Typically, it’s because it becomes clear a given vehicle isn’t possible to economically insure, or that it doesn’t suit a given insurer’s risk profile. For example, some insurers don’t like to cover exotic vehicles due to the potential high repair costs involved. Meanwhile, other insurers specialize in that exact market. Each charges accordingly, and manages their business model to ensure profitability. It could be that GEICO has found the figures for insuring a Cybertruck aren’t to its taste. Maybe they’re too risky to take on, or too expensive for the insurer to consider worrying about.
There has been a lot of bluster in the press about the repairability of Tesla’s vehicles, particularly where gigacastings are involved. The truth is that these vehicles can be fixed, assuming a ready supply of spare parts. It is entirely possible that, as a new vehicle, Tesla doesn’t have a great supply of Cybertruck spares on hand. Indeed, one could imagine a high need for these parts in the case of a Cybertruck crash. Traditional bodyworking techniques that might save a regular car’s panels might not work so well on bare, unpainted stainless steel. But this is just a theory.
On background, GEICO did tell The Autopian that “Because of its gross weight and potential challenges with parts availability for repair shops, some customers may have received notices stating that PPA insurance would not be renewed for this vehicle. However, policies for this vehicle have always been available through our commercial insurance division, and now remain available via PPA as well.”
This seems to give some credence to the theory that people did indeed get nonrenewal notices and that, in some places, differences in state laws led to owners being informed that they should switch to commercial vehicle insurance. That last bit of “now remain available via PPA as well” seems to be an indication that GEICO has decided it’s better to insure the Cybertruck than it is to raise a fuss.
Either way, GEICO also said it would be reaching out to all its customers who received a non-renewal notice.
In any case, there are plenty of other insurance companies out there. Owners groups have reported success gaining coverage with USAA and Progressive, among others.
Image credits: Tesla, GEICO.com via screenshot, Cybertruck Owners Forum via screenshot
George is in his office at Yankee stadium, he pushes ‘play’ on a cassette
recorder. The voice on the tape sounds exactly like George.
Voice: Chapter one. In order to manage risk we must first understand risk.
How do you spot risk? How do you avoid risk and what makes it so risky?
George: This guy sounds just like me.
Voice: To understand risk, we must first define risk.
George: This is horrible.
Voice: Risk is defined as–
George (banging the recorder): Stop it! Stop it!
I have 4 cars on a policy with much higher liability limits for less than of that.
I’m insuring 4 vehicles with high school and college students on the policy at Geico for much less than that. That is complete insanity.
“High repair costs and parts shortages” aaaaaaand let’s not forget the spit and papier mache build quality that ensures this will usually be a problem in the first week of ownership.
The Nimrods on YouTube purposely destroying their Cybertrucks aren’t helping. Cybertruck owners are paying a fallout tax just like Hyundai/Kia owners.
Jesus balls, $500/mo? Is this a standard price in the US for insurance?
There is no “standard price.” All depends on your driving history, type of car, the state where you live and drive, and the amount of other business you’re giving the insurer. In this case, I’d say this is a low estimate. The bodily injury liability limit in the author’s example is super-low.
For 15/30 limits and no collision coverage!
No, definitely not.
Yeah, I imagine this is a big premium based on 1. being an EV, 2. being a Cybertruck in particular, and 3. based on the areas chosen for the quotes.
I have a 2012 Prius v and at this point my 6-month premiums are ~$550-600 in a mildly urban area, for much better coverage than this example.
Nonetheless, Lewin’s point stands, I think…it appears they should still be insurable.
Interesting justification. In California, *ALL* pickup trucks are registered as commercial vehicles. I kinda doubt Geico is forcing every California owner of a Ford Maverick or Honda Ridgeline to have commercial insurance policies.
In the UK (and some/much of Europe) the Cybertruck is heavy enough that you’d need a C1 “medium sized vehicle” license to drive one. They’re not that tricky or expensive to get, but generally people only get them to drive commercial vehicles.
Thoughts:
1) This was absolutely an underwriting prohibition on CyberTrucks by Geico.
2) Commercial Auto rates are usually far higher than personal. They don’t actually expect their customers to pay commercial rates.
3) The state vehicle classification stuff is pure high-grade bullshit.
4) Geico got called out and so reversed the prohibition (for now).
5) Geico can reverse the reversal just as quickly and will do so the moment the bad press dies down.
6) CyberTrucks are idiotic and Geico was right in trying to have nothing to do with them.
I think it’s just one multi billionaire punking another. Warren Buffet is the big Kahuna of Berkshire Hathaway and GEICO has been a wholly owned subsidiary of BH for about 30 years.
You would think they wouldn’t do that seeing as they (most likely) have each other over for monthly child solicitation/sacrifice island parties or whatever billionaires do.
Wow, that’s nearly my 6 month premium for two vehicles!
Edit:
I just checked and adding it to my existing Geico policy would cost an additional $1300 for 6 months.
Holy hell. Last time I saw a monthly insurance quote like that, it was for a teenager with multiple infractions on record.
Those are some hilariously low liability policy limits for $485/mo.
Yeah right? Scary shit.
Have they considered just getting boat insurance?
That’s for Rivian’s only
They won’t cover a Tesla for that after Mitch McConnell’s’ SIL.
Who made the rule a boat has to float! Elon said you can use it as a boat. He never said where said boat would travel. Maybe it’s a boat for land. Real untapped market, I believe they’re called land yachts.
Auto insurance underwriting is very rules based. And the rules used (at a high level) are filed with and approved by state insurance regulators. There is some discretion with the insurer but that is also a matter approved by state regulators.
My guess is that the non-renewal letters went out in the ordinary course and that someone up the chain had the company u-turn when they realized that it would get bad press.
It’s not uncommon for larger carriers to exclude exotics. Due to a lack of underwriting data or lack of expertise in adjusting losses (managing claims experience via repair management, etc.).
The actual cost to repair (cost of a loss) is never really a factor as long as it is relatively known/consistent or estimable. Insurers will insure anything as long as the relative risk to the insurer (ie. the likelihood that the loss is known/knowable within a certain standard deviation) is acceptable. The problem is that when there is a huge variation in loss costs/experience they have to price the risk into the premiums and the results is it becomes very expensive. When the uncertainly around loss becomes so great that their filed rating rules don’t have an upper limit high enough to cover the risk then they will almost always drop coverage… except where it could cause some PR or political issues.
In this case it sounds like nobody escalated the potential PR issue and they had to do a u-turn and damage control once someone realized it was going to cause too big a stir. I wouldn’t be surprised if the fact the Musk is buddies with Trump now played into their decision.
Are those rates normal for a vehicle that costs this much? Admittedly, I drive a humble 23 RAV4, but good insurance costs me about $700 a year.
Yeah, that’s almost more than the value of all my cars combined.
$600 a month for vehicle insurance? I guess one of the following is considered risky:
drive by wire
unquenchable fire
pedestrian bowling
“self driving”
flying hubcaps
losing fingers
Also note those rates are for state minimum coverage, anyone who can afford a CT would want much higher limits to actually protect themselves.
I would be afraid to ride a scooter with that level of coverage.
You forgot “intentionally shooting at it for YouTube.”
Don’t forget all of those eye doctor bills for people who look at it
This is the real story but Lewin is unable to talk about that by fear of pissing elon off
I’ll state it again: anything can be fixed, it’s whether or not it’s economical to do so that counts. The production, storage, and transportation of spare gigacastings is a massive negative in terms of economic repair and that doesn’t get into having to disassemble so much of the vehicle to replace it, including a lot of mechanical components that may need to be aligned on a special jig or parts additional parts that might need to be replaced either because it couldn’t be seen with the part in place or error in the course of replacing such a large, heavy, and cumbersome piece (the shop might have to eat the specific damage, but more than a time or two of that and they’ll refuse the jobs). That also only talks about the now, while the vehicles are new enough to have some value (also ignoring greater EV depreciation), and not once the vehicles are discontinued and nobody is making gigacastings anymore.
So what you’re saying is… it’s a lemon.
GEICO: We need to analyze availability of spare parts, repair techniques, and overall vehicle value before we decide if we can insure your expensive and very new vehicle.
Progressive: Does it have wheels and a place for an ass? Cool. That’ll be $80.
I’ve been with a bunch of insurers over the years and the only one I don’t hate is Progressive. The only thing I don’t like about them is that they do like all the companies do, raise your rates each period for no reason, pushing me to go somewhere else (before they do the same thing and I end up back at Progressive . . . I think I’m on my 3rd time with them).
Try State Farm.
I can’t vouch for whether StateFarm is good in the event of a claim….but when Geico hiked my rates by $100 for a 6-month renewal (from about $500 to $600), I switched to StateFarm for ~$550 for better coverage.
I had them last. Hated them. They kept sending me some BS about my VIN being wrong when their paperwork, my paperwork, and the actual damn all matched and I had to call them each time, deal with the whole BS layers of robot receptionists that never has the right options and get on hold for a while to clear it up each time, only for them to send me another one a couple months later. Then they tripled my rates for no reason, so I went to Progressive for significantly less. Fought SF over several phone calls as they refused to cancel the policy and stop charging me until I found their apparently non-existent red tape G-spot. Finally, I had Progressive get on a 3-way call with those POS and get it resolved over a fairly long call. The Progressive rep says she had never encountered such a thing before and I never had an issue with changing with anyone else any time in the past. I also hate Geico and Commerce/MAPFRE, but I’ll save that rant. It’s a long one.
Underwriters determine risk from so many factors (driver history, area driver history, previous claims, average cost of replacement/repair). Because cars are getting more expensive to fix (due to safety features, aerodynamic features, lack of parts), more expensive to replace (thank you, inflation), people suing for accidents rightfully or not, car theft (thanks, Kia/Hyundai), more natural disasters, etc., insurance ain’t cheap. They are in business to make money, and if all the money is taken due to paying out claims, then they’d go under.
If enough things stack up against you as an individual, it’s easier for the insurance company to boot you from the policy than to cause everyone else’s premiums to skyrocket. For example, my insurance company threatened to boot me from the policy unless I sold my salvage car. Apparently, between 2 hit and run incidents (not my fault), a couple of windshields, and owning a R/S car, I was too high risk. Sold the car and renewed.
My recommendation is to re-shop your policy every term, get clever about insuring older cars under a classic car policy if you can, and ALWAYS use a broker (Policy Genius is pretty clutch). Also, please don’t run into trees…those are WAYYY more expensive to replace than one would expect. Final thing… if someone hits you and is at fault, please try to call their insurance first. Apparently, starting a claim at your insurance (even if not paid out) will still ding your record.
This is one of those things where the risk factor exists even though it seems counterintuitive. Someone who gets into one accident (even if not at fault) is more likely to be in another one — and at fault in a later accident.
Not starting the claim at your insurance company might still ding you, everyone sells your data these days…
That was the beauty of talking to the Broker… they would actually share my risk profile with me.
It’s been posited elsewhere, and I agree, that it likely has a lot to do with relative rarity, the fact that they’re high-profile vehicles (and therefore a likely target for vandalism), the cost of repair (you have to sand the entire side of the car with a random orbital sander in several decreasing grits to buff out scratches), the number of breakdowns and failures, and the stunts that people are pulling with them.
This feels like one of those things where it’s not that Geico decided to drop Cybertrucks specifically, but something about pickup + over $100k + commercial vehicle rating from the DMV triggered underwriting rules.
People forget that vehicle insurance is a risk calculus, and riskier vehicles should cost more to insure. Even leaving aside the debate about whether a vehicle should be necessary to live, the type of vehicle is still subject to the laws of reality.
States may need to revise the GVWR cutoff for commercial vehicles to take EV weights into account
Why? The whole idea was that heavier vehicles (which are inherently more dangerous) should require additional licensure to operate.
I’ve never had an issue insuring an F350 (with a much higher GVWR than any Cybertruck) as a passenger vehicle.
Granted that is with State Farm and Allstate, not Geico, so it’s possible they have different thresholds. But strictly by curb weight and GVWR, there is no major difference between a Cybertruck and a “normal” pickup.
I wonder if the person who got dropped registered their Cybertruck under an LLC for tax reasons, and then got surprised when that meant they needed commercial plates & commercial insurance.
It wouldn’t surprise me if insurance tried to force truck owners over to the commercial side. Insurance companies are getting crazy. Over on the semi truck side $50k to $90k a year quotes are common. Hell, I have 1.5 million miles under my belt accident free and I get quoted $50k. Which is why I can’t own my own truck.
It’s a combination of increasing accident repair costs + high medical costs. The payouts on all kinds of insurance where you might experience medical liability are through the roof.
Unfortunately, insurance companies write checks every day for drivers who had 1.5 million accident free miles before an accident where they were liable.
Very true. But it still sucks
I hate everything about the Cybertruck and would love to see it fail but this scenario we’re in where we’re legally required to have insurance (to register a vehicle in my state at least) yet insurance companies aren’t legally required to offer insurance coverage at reasonable prices, or at all, is totally fucked
Relating back to shopping for motorcycle insurance: you get “fuck you” quotes all the time.
It’s part of shopping around.
Don’t expect to buy the latest/greatest big-bore sportbike and expect everyone to give you “reasonable” quotes since your vehicle is hardly that.
But if, instead, the average car (e.g. a couple-year-old Civic/Corolla) were to become unreasonable: then I might have some empathy.
First they came for the Cybertruck, etc. Things will get to this point without the government stepping in. Geico netted $3.6B in profits in 2023 and just ended Q2 of 2024 with $1.78B in net profit. They also have raised rates countrywide by 30% from 2022-2023. It’s obscene.
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/largest-us-private-auto-insurers-boost-rates-by-double-digits-in-2023-80011993
Geico’s total revenue in 2023 was $39.6bn (in earned premiums) with an underwriting ratio of 90.7% (that means roughly ninety-one cents on the dollar went to pay claims). Saying “look at how much profit” is irrelevant unless it’s put in context.
In 2022, they lost $1.88bn on slightly less revenue — that loss is why you saw the rates go up. Generally, insurance rates get submitted sometime in the prior year — they increased rates for 2024 before they saw the results of 2023.
People somehow don’t understand that insurance needs to take in enough money to pay out all their claims, with a little extra for the bad years.
The question is: should the government subsidize you driving an expensive car?
Sure, but they were profitable in 2021 after posting a record profit in 2020, and after posting profits every year from 2002 to 2019 with the exception of 2017. A 30% increase year over year is absolutely insane.
They increased rates by 30% and had the same profit margin isn’t the argument you think it is. It proves that the rate increase was totally reasonable — because the business didn’t change its state!
That’s literally the argument Geico will make to state regulators when they question rate increases for 2025 (which are going through regulatory approval now), because they have proof their actuarial models show they need to increase rates to keep the business running in the same way.
Actually, most states require insurance companies to operate withing state established profit margins. Whether the state just rubber stamps rate increases is arguable. Also, a state can’t force a company to do business within their borders, they can only establish rules for those businesses that do business within their borders.
Insurance companies offer to cover you at a price they think will cover your expected claims payout. There absolutely should be a point at which a car is too expensive to insure because of the inherent risk.
This is literally the free market deciding whether a car is too dangerous to be on the roads or not, because the government has abdicated that responsibility entirely through lack of enforcement, relaxing of safety rules, and removal of inspection requirements.
There’s a reason the US is the only country in the world where per-capita road deaths are increasing.