Geico, owned by Warren Buffett’s Berkshire Hathaway BRKABRKB, is refusing to pay for damages that one of its insured drivers caused to a Tesla Inc. TSLA vehicle.
What Happened: Tesla owner Jeff stopped his vehicle to allow an ambulance to get through. The ambulance hit Jeff’s Tesla.
“She (the ambulance) bumped us,” he said. “We have State Farm insurance and [the ambulance driver] has Geico insurance.”
An officer that witnessed the accident, Jeff, the Tesla owner, claims.
When Jeff scheduled an appointment to get his car fixed with an authorized Tesla body shop, the estimate to fix the damages was $2,000.
The body shop informed Jeff that Geico wouldn’t pay the rates to fix the vehicle, and there is a significant rate difference between the prices Tesla charges for parts and what Geico covers.
“He said, ‘You can use State Farm, you can pay cash, or you can find another repair center, but I’ve got to tell you all of us who are authorized Tesla repair centers in the Valley have banded together because we’re trying to fight Geico.’”
Jeff has been in contact with a Geico adjuster he hopes can solve the problem.
“He said, ‘you go ahead and file it through State Farm and you don’t have to pay your deductible. As soon as you file your claim over there and put your car in and ask for your deductible, they’re going to contact me and I’m going to forward the deductible. We’re 100% at fault for the accident.’”
Despite the solution, the car won’t be get repaired until Dec. 12, 2022. Why? Tesla-certified body shops are booked and Geico is taking time to come up with a solution to the repair.
Why It’s Important: The story exemplifies how insurance companies find fault with Tesla’s use of authorized body shops and costs for parts and labor.
While Geico is working with this customer, it comes with a delay in the vehicle getting fixed.
Meanwhile, Buffett has shown support for Tesla CEO Elon Musk and electric vehicles.
Tesla has also entered the insurance market with a plan to lower costs for Tesla owners and non-Tesla owners. Tesla insurance is currently offered in Arizona, where Jeff resides, as well as California, Colorado, Illinois, Maryland, Nevada, Ohio, Oregon, Texas, Utah and Virginia.
The electric vehicle giant uses real-time driving behavior for insurance with a mission to lower costs and determine a price based on “what vehicle you drive, your provided address, how much you drive, what coverage you select and the vehicle’s monthly safety score.”
According to Tesla’s website, customers can save between 20% to 40% on insurance and the safest drivers could save between 30% to 60% versus competitors.