Class Action Alleges State National Inflates Tesla Insurance Costs for ‘Ghost’ Forward Collision Warnings

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A proposed class action aims to stop State National Insurance Company from allegedly charging inflated premiums based on random, “ghost” forward collision warning signals sent from covered Tesla vehicles. 

The 13-page case in Cook County, Illinois Circuit Court says that State National has partnered with Tesla to provide insurance services to drivers through a “usage-based safety discount program.” Per the suit, this program is in line with a new “industry push” to charge drivers fairer premiums based on their driving habits. 

The lawsuit relays that State National’s usage-based insurance emphasizes five “safety factors” collected from consumers’ Teslas that are used to generate a “safety score,” based on a 0 to 100 scale, to help calculate their premiums. These factors include forward collision warning alerts, hard braking events, aggressive turning events, unsafe following events and forced autopilot disengagement events, the complaint states. 

According to the lawsuit, however, certain Tesla drivers’ safety scores are improperly reduced due to “ghost” forward collision warnings that Tesla vehicles send when there is no actual danger or another car in sight. The suit places blame for this alleged occurrence on “the advanced and still in development technology” behind Tesla’s semi-autonomous driving features, some of which, the lawsuit claims, “do not always work as intended.” 

“Nonetheless, Defendant unfairly charges its Tesla customers for higher monthly premium fees based on these ‘unsafe’ driving events that never actually occurred,” the case alleges. 

Crucially, the lawsuit says, because State National calculates the number of forward collision warnings per 1,000 miles, and supposedly weighs them more heavily than at least three other safety score factors, false warnings cause “an immediate downgrade” in a Tesla driver’s safety score, causing higher monthly premiums. 

“The effect is particularly pronounced for Tesla drivers who only occasionally drive and who only have the next 30 days to try to average more miles with the hopes to boost their Safety Scores by not having any Forward Collision Warnings appear,” the suit adds. 

The lawsuit contends that Tesla drivers would not have bought insurance from State National, or would have paid less for it, had they known their monthly premiums would be based on false forward collision warnings that “they did not actually cause and had no control over.” 

The lawsuit looks to represent all individuals in the United States who, within the applicable statute of limitations period, bought usage-based insurance from State National Insurance Company for their Tesla vehicle. 

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