We have seen many people question what the insurance market is going to look like for the Cybertruck given that it is such a unique vehicle, and there is truly nothing like it to compare it with. So here we are going to break down how companies rate brand new vehicles and our predictions for the future insurance outlook of the Cybertruck to help you make a more informed purchase if you are considering one.
How new vehicle rates work
When it comes to brand new vehicles, there are typically three ways insurance companies rate them.
The first is an educated guess; they will take other “similar” vehicles and the available data from them and try to formulate the rates based on that. With that in mind, I believe the vehicles that will be factored in by companies would be the RIVIAN R1S and R1T, the brand new HUMMER EV, and the Ford Lightning. If you took an average cost of these vehicles' insurance premiums and then adjust based on any cost difference in the vehice itself that is what the company will use as a starting base for pricing the cyber truck and then make large adjustments over the next 1-2 years as more information becomes available.
The second way is based purely on MSRP, and this MSRP may be asked for verbally from the customer or they may have a base MSRP that they are using for their rates. This way of rating is perhaps the most common and you can expect large changes in price within your first year of ownership once the company has enough data to move off of that model to a vehicle-specific model.
The third way, is where a company will make a gross overestimation of their costs and will lower prices as they have enough data to do so. This is a not so subtle way of the company telling you they have no idea what to charge, and they would prefer to not insure it at all but will give you the option to pay an exorbitant price if you so choose. This is actually quite common and can still be seen often with new EV brands such as Lucid having wildly different prices compared to other similarly priced vehicles, and I expect this will be quite common for the Cybertruck in at least the first year.
Lastly, many companies will simply not insure it at all until they have data to base the prices off of. This will be more common in states where insurance companies are already more stringent such as Florida and Texas amongst many others, and a company may offer coverage for it in one state and not in another based on how they are approaching business in that area and how much business they are attempting to write.
Our predictions for future rates
Our predictions for future Cybertruck rates have a lot of questions with it being such an incredibly unique body design. The labor rates will most likely be incredibly high for the first 2-3 years until enough shops have been certified and have the experience to repair them, and create enough competition in the market to drive prices down.
Another big question will be the part availability. Being an entirely new vehicle with virtually no generic parts, part availability is something likely to drive up repair times and prices for said parts. This will also result in many vehicles being totaled.
When it comes to the actual damages sustained in accidents, there is good and bad news as the vast majority of insurance claims are from door dings and parking lot fender benders, and if the Cybertruck is nearly as durable as Tesla claims, this will mean many of the small dings that used to be claims from somebody opening their door into yours or a rogue shopping cart hitting your vehicle should not cause any damage and should result in a significantly reduced frequency of minor claims.
However, this will also result in many vehicles being totaled from damage to the wrong components and has also been the Achilles' heel for Tesla in regards to insurance as the large battery packs and various highly expensive components drive up the odds of the vehicle being totaled from somewhat minor damage, particularly with the Cybertruck as the lack of a traditional crumple zone has been replaced with a system to divert the energy through to the rear wheelbase, which we assume means any head-on collision that deploys that mechanism will result in most of the powertrain system in the rear needing to be replaced, increasing the odds for it to be totaled.
With this information in mind our best predictions in the long term would be this places rates in the realm of a base Model X for the rear-wheel-drive Cybertruck, near the price of a plaid Model X for the dual motor and most likely 10-15% higher than a plaid model X for the 3-motor Cyberbeast version.
I would generally anticipate rates for the Cybertruck being higher than any of Tesla's other models relative to vehicle cost but not by a considerable amount I believe the current closest vehicle to it that you could ask an insurance company to quote you off of if they do not have rates available for the Cybertruck yet would be the new Hummer EV.
What coverage you should be concerned about with the Cybertruck
From our experience, there are some coverages you should really prioritize with the Cybertruck, especially early on.
The coverage that stands out the most right away is going to be car rental coverage. Being that it is such a new vehicle, repair times will most likely be significantly longer than a standard vehicle. This is something I have always talked to Tesla owners about, as early on in the Tesla life cycle, parts were often on longer than normal wait times. And then with the onset of COVID, that exacerbated that issue. Recently, they have come down considerably from where wait times were 2-3 years ago, but I expect that cycle to repeat itself with the Cybertruck. This is why I would recommend taking the highest possible option with your insurance company, as I anticipate 2-3 month wait times for more mild to severe accidents will be commonplace for the early life cycle of the vehicle and it is generally not a very expensive option to increase.
The other coverage we highly recommend reviewing would be your liability coverage. The Cybertruck is going to be a very heavy, very solid vehicle, which is great to be in if you are going to be in an accident to protect yourself. However, this means you are more likely to cause severe damage to other vehicles who are going to be taking the brunt of the force. Statistically, larger vehicles are safer for the driver and more dangerous for the other parties involved. In order to best protect yourself, make sure you have adequate liability coverage, as the state minimum in every state is nowhere near sufficient. As the writer of this article, I personally carry liability limits of 250k per person in liability up to 500k total and 100k in property damage per occurrence, and I included a 1 million dollar umbrella policy over top of that. Serious accidents are much more common than you think, and all it takes is one moment to change your life forever. Just thnk about it if you totalled someone else's Cybertruck that would cost a minimum of $80,000 for the configurations being delivered this year that can quickly excede most liability limits and and leave you on the hook for everything beyond your coverage limits so please make sure you protect yourself.
This completes our thoughts on the future of insurance for the cyber truck. We hope you found this guide helpful, and please feel free to ask us any questions about insurance at info@evownersinsurance.com.
If you have insurance needs or would like to see how much it would cost to insure a Cybertruck, please click the link below and let our team of EV experts at EV Owners Insurance prepare a quote for you.
Disclaimer
All opinions shared in this article are my own and insurance is regulated on a state level so please contact a licensed insurance producer in your state for the most accurate information
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