Elon Musk slams AAA for charging Tesla owners more and encourages customers to change providers

Elon MuskTesla CEO Elon Musk speaks at the company's shareholder meeting on June 6, 2017.Screenshot/Tesla

Tesla CEO Elon Musk told Tesla owners on Tuesday to consider changing insurers if they belong to AAA.

Earlier this week, it was revealed that US insurance provider AAA of Southern California plans to raise rates for Tesla owners, in some cases by as much as 30%. The insurer cited a high number of claims frequencies for the Model S and Model X as the reason for the spike in premiums.

During Tesla’s annual shareholder meeting on Tuesday, though, Musk defended the safety of the Model S and Model X. He also shared a simple piece of advice when asked by a shareholder what he thought of AAA’s increase in Tesla insurance premiums.

"Somewhat randomly, Southern California hugely increased insurance premiums. There is a simple solution, change your insurance provider," Musk said at the meeting. "

"From the study we did the average rate for insuring a Model S or Model X is about 5% lower than other premium vehicles and if you actually pick the right insurance provider it can actually be 20% to 30% lower. For death or serious injury in an S or an X, it’s really hard to do that," Musk said.

Musk said that there are a few features that make Tesla vehicles so safe including the cars’ emergency braking system, which gets better with each software update, and the vehicles’ crumple zone, which is the structural feature in cars that is created to absorb energy in the event of a collision.

"Because the Model S and Model X have such a long crumple zone, it’s two to three times longer than conventional automotive cars that’s got a big engine steel block in there, it means that even the car that you hit, the combined crumple zone of both cars is substantially greater than if two gasoline cars hit," Musk said.

"So the safety is not just good for people in the car, it actually helps if you do have a collision with another car."

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