Elon’s Tesla insurance won’t fault you for fake forward collision warnings after class action lawsuit

Elon Musk’s Tesla has made major changes to its controversial Safety Score system, which is a big part of its own insurance program. This comes after a class-action lawsuit claimed drivers were overcharged because of incorrect forward collision warnings (FCWs). By removing FCWs from how the score is calculated, Tesla is changing how it assesses risk and deals with customers.

As reported by Drive Tesla, the Tesla Safety Score was first introduced in 2021 to set personalized insurance prices based on real-time driving data. The system gave drivers an overall score using different factors, including hard braking, aggressive turns, following too closely, driving too fast, driving late at night, times when Autopilot turned off unexpectedly, and—until now—FCWs. A higher score meant lower insurance costs, while a lower score meant higher premiums.

The FCW part of the system caused a lot of problems. Tesla’s system was supposed to warn drivers about possible crashes where they needed to take action, but it often gave false alarms. These warnings would go off even when there was no real danger, which unfairly hurt drivers’ scores and made their insurance more expensive.

Tesla adjusted after lawsuit over false collision warnings claim

This issue led to a class-action lawsuit filed by Ricky Stephens (via Reuters), a Tesla driver from Illinois, on behalf of all Tesla Insurance customers. Stephens argued that the system gave “random and unpredictable Forward Collision Warnings when there was no actual danger,” unfairly raising insurance costs. Tesla tried to get the lawsuit thrown out, but a judge in California ruled that the case could move forward.

Facing legal trouble and bad publicity, Tesla quietly took FCWs out of the Safety Score in version 2.2 of the system. Now, the score is calculated using only these factors:

• Excessive Speeding: This part has been adjusted. It still penalizes driving over 85 mph, but now it also looks at how fast you’re going compared to the car in front of you. If you’re driving 20% faster than the car ahead (and going over 25 mph within 100 meters), you’ll get a penalty. This factor now makes up 10% of the score, up from 7.1%.
• Unbuckled Driving: This part has seen the biggest increase, going from 18.2% to 31.7% of the score.
• Late-Night Driving: The hours that count as “late-night” haven’t changed, but this now makes up 14.2% of the score, up slightly from 13.7%.
• Unsafe Following: This part has been slightly reduced, from 63.5% to 63.2%.
• Hard Braking: This now makes up 13.2% of the score, down from 14.7%.
• Aggressive Turning: This has also been slightly reduced, from 5.3% to 5.2%.

Removing FCWs changes the lawsuit’s situation. The case is still active, but Tesla could argue that the problem causing overcharging is now fixed, which might lead to a settlement. Or, the lawsuit might focus only on past damages from when FCWs were still part of the score.

At first, Tesla Insurance was popular because it was cheaper than traditional insurance. But lately, the company has faced criticism for raising rates, even though it claims the Safety Score encourages safer driving. Tesla’s 2022 Impact Report said drivers using the Safety Score had fewer accidents, but customers are still unhappy.

Adding to the debate, the Safety Score was also used to decide who could join Tesla’s Full Self-Driving (FSD) Beta program. This raised questions about fairness—should a system tied to insurance costs also control access to new technology? Tesla has also tried to get more people to use FSD by offering insurance discounts to drivers who use it more than 50% of the time, but it’s unclear how well this is working. One thing to note: except for late-night driving, using Autopilot doesn’t affect the Safety Score.

Taking FCWs out of the Safety Score is a big move by Tesla, admitting that the original system had flaws and responding to the lawsuit. The legal case isn’t over yet, but these changes suggest Tesla might be adjusting how it handles insurance and driver scoring. This situation shows how important it is for car insurance companies—especially those using real-time data—to be transparent and fair with customers.