One of the world’s largest insurance companies appears to have ended coverage for Tesla Inc.’s TSLA Cybertruck, averting tensions between two of the most valuable companies run by two of the richest people.
What happened: As reported by Torque News, Geico has removed the Tesla Cybertruck from coverage.
Geico is owned by Warren Buffett’s Berkshire Hathaway BRKBRK.
Robert Stevenson, who owns the Cybertruck, shared on social media platform X that GEICO told him he could no longer insure the Cybertruck.
“That doesn’t make sense because there are other cars out there that are more dangerous. If you have any recommendations for insurance companies for that truck, please let me know. I have 8 cards with great records. Geico insurance. All canceled,” Stevenson tweeted.
Stevenson shared a letter from Geico that appears to have terminated the Cybertruck’s insurance policy.
“After careful review of your insurance policy records, we have determined that we are unable to continue your insurance coverage for the 2024 TESLA CYBERTRUCK,” the letter reads.
The letter also states that the Cybertruck “does not meet our underwriting guidelines for this type of vehicle.”
The Cybertruck is unique with its quirky stainless steel design. It also has features that make it stand out from other pickup trucks and electric vehicles (EVs).
Torque News lists several reasons why Cybertrucks are riskier to insure than other vehicles, with high costs and waiting times being perhaps the biggest problems.
A Geico spokesperson confirmed to The Verge that the company “Tesla Cybertruck is available nationwide.”
According to the National Association of Insurance Commissioners, Geico ranks third in U.S. auto insurance market share (12.3%). It ranks behind State Farm (18.3%) and Progressive (15.2%).
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Why it matters: The fact that Geico’s comments and Stevenson’s tweets have been deleted could indicate a potential misunderstanding or the omission of some facts from the storyline.
Still, this isn’t the first time Cybertruck owners have reported having trouble getting insurance for their electric pickups.
Buffett has clashed with Tesla CEO Elon Musk in the past, but the 94-year-old investor has praised Musk in past interviews.
Based on Buffett’s comments at Berkshire Hathaway’s annual shareholder meeting earlier this year, speculation may continue that Geico is looking to minimize the risk of Tesla vehicles in the future.
Tesla and Berkshire Hathaway investors asked Buffett about the risks of fully self-driving cars (FSD) to insurance companies.
Buffett said that while lower accident rates are good for society, they could be detrimental to insurance companies based on volume.
“You know, what we want is good for society,” Buffett said.
The billionaire said lower accident rates could mean lower insurance premiums for consumers.
Tesla began deliveries of the Cybertruck in November of last year. Since then, the truck has become a staple of Tesla’s EV lineup.
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Photo courtesy of Tesla.
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