[widdakay]

Can someone find more about why GEICO did this? It makes no sense. Furthermore, they could just increase rates if they found accidents too common.

Also, there are much less safe cars out there for pedestrians such as the Hummer EV (complete behemoth) or Rivian (weighs more than CT and has significantly higher frontal profile which is shown to be the largest contributor to pedestrian safety above basically anything else). If it's about breakdowns, that money comes from Tesla's wallet so would make no sense. Even so, I see Cybertrucks driving daily and haven't seen a broken down one yet.

[Salgat]

My understanding is that any damage to the cybertruck unibody frame, no matter how minor, becomes a catastrophicly expensive repair. There are many laws surrounding fair pricing of insurance rates, and Geico might not want to go through the legal work of justifying massive rate hikes specific to the Cybertruck over just dropping such a tiny volume of vehicles, especially if their "profitable" pricing just drives all their customers away anyways. Also keep in mind that in the meantime they're locked into their current rates until each state approves a higher rate.

[dd82]

Rivian is likely heading this way too, there's plenty of stories about a fender bending costing 42000 to fix

https://www.theautopian.com/heres-why-that-rivian-r1t-repair...

[AStonesThrow]

It looks like the Cybertruck is more like a Delorean than I thought!

[zamalek]

Insurers work with data/metrics and generally make decisions based on that alone[1]. I often feel that it's unfair that I pay more as a male, because I am an extremely responsible and defensive driver - fact is, men cause more expensive accidents more often. That's the data, that's what insurers care about.

At some point Geico likely did insure super cars, up until they started becoming highly anomalous in the data. The same has happened to cybertrucks, whether your highly restricted sample demonstrates it or not.

Insurance companies don't turn away profitable customers. Cybertrucks became a problem for Geico, but they are being tight lipped as to why; it might not be a reliability issue.

[1]: https://en.wikipedia.org/wiki/Quantitative_analysis_(finance...

[acdha]

> I often feel that it's unfair that I pay more as a male, because I am an extremely responsible and defensive driver - fact is, men cause more expensive accidents more often. That's the data, that's what insurers care about.

Same - I remember a few friends complaining about this but an older friend basically explaining how insurance worked from the perspective of the company. Almost everyone will swear that they’re a great driver, and they can’t tell the difference until you’ve been driving for years. The only alternative would be the kind of monitoring + speed limiters that most drivers get extremely upset about so it’s unlikely to change before we get L5 self-driving.

[joshribakoff]

> they could just raise rates

Well, they (insurance companies in general ) also dropped a lot of homeowners in certain states, rather than simply raising the rates.

Perhaps they have done some market research and determined that there is an inflection point beyond which raising rates would actually reduce profits due to reduced competitiveness

[dd82]

Car insurance in general is a race to the bottom with competition. A good quarter has 70% of incoming premium going out to settle claims.

When you have fender bender claims costing 20-40k USD to repair, how do you price that risk?

[aleph_minus_one]

> When you have fender bender claims costing 20-40k USD to repair, how do you price that risk?

This is a solved problem. Ask any actuary who specializes in casualty insurance, or read a standard textbook about non-life insurance mathematics.

[gnu8]

Shush, I want to see a YC25 auto insurance startup that uses a pile of overheated video cards as a crystal ball to make underwriting decisions.

[pokerface_86]

most people buying specialty casualty insurance also have MUCH deeper pockets than even most people buying a cyber truck

[dd82]

Not really, car insurance rates need to go through alot of state level validation in order to be approved.

Other models are not considered insurable by GEICO as well. So likely small pool of policyholders + exorbiant claim payments == not worth the headache

[datavirtue]

The reasons listed in the article are spot on. Ridiculously high repair costs is enough. With ridiculously high repair costs come extended repair times (rental car and claims management). There comes a point where just increasing the premium price can't offset risk.

There is nothing practical about Cybertruck ("Cybertruck," really?). It's a collector's vehicle.

[rsynnott]

> Can someone find more about why GEICO did this? It makes no sense. Furthermore, they could just increase rates if they found accidents too common.

Very few insurers will insure literally anything (back in the day, Lloyds of London were notably unusual in that they would write a policy on basically anything, though you mightn't like the cost). Most conventional insurers will have a line after which they say "this is too risky, we'll leave it to specialist insurers". Ask anyone who's ever tried to get insurance on a non-conventional-construction house.

And it's a pretty niche vehicle; if they do find it unacceptably risky, then dropping it is presumably a fairly easy decision.

[widdakay]

Good point I had not thought about the remaining parts of the economics if they did go though with something like a rate hike.