Tesla is about to face a class action after a judge refused to dismiss a lawsuit alleging that the automaker overcharged people using its insurance with “real-time data” after increasing their premiums over “fake crash warnings.”

When launching its own car insurance product, Tesla utilized its capacity to collect real-time driving data from its vehicles to create what it calls a “Safety Score,” which gives drivers a score based on how and when they drive, increasing or decreasing their monthly premium accordingly.

The move was to counter the fact that many third-party insurers were charging very expensive premiums on Tesla vehicles.

There has been some controversy about the factors that would influence the score, like acceleration, driving at night, and collision warnings. The problem with the latter is that Tesla’s Autopilot safety system often gives collision warnings for no reason.

These “fake” collision warnings can increase the monthly premiums of someone using Tesla insurance.

Illinois resident Ricky Stephens was one of those people using Tesla insurance and experiencing fake collision warnings. He filed a lawsuit on behalf of all Tesla Insurance users in which he described the problem (via Reuters):

Numerous Tesla drivers have “reported suffering sporadic and random Forward Collision Warnings when there is no danger in sight,” which affects their safety score and drives up their premiums, the complaint said.

Tesla tried to have the lawsuit dismissed, but a California judge denied the dismissal:

Oakland-based Judge Brad Seligman of Alameda County Superior Court in an order on Friday denied Tesla Insurance Services Inc’s bid to dismiss the consumer protection lawsuit, which was brought under California’s sweeping unfair competition law.

Now, the case will move forward to a hearing early next year.

Electrek’s Take

I don’t use Tesla Insurance, but I’ve definitely experienced many collision warnings that made no sense whatsoever.

There should be a way to contest those so they don’t affect your premiums.

If Tesla indeed charges people more over some of those, then yes, the company is at fault and should compensate those owners. I am rarely for legal actions – it’s very much a last resort – but this looks like a case where it makes sense.

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MuskWire TLDR:

Tesla is facing a class action lawsuit after a judge refused to dismiss a case alleging that the automaker overcharged customers using its insurance based on “real-time data” following an increase in premiums due to “fake crash warnings.” Tesla launched its own car insurance product, using real-time driving data to create a “Safety Score” that determines monthly premiums. However, there have been concerns about the factors influencing the score, including collision warnings generated by Tesla’s Autopilot system for no reason. These false warnings can raise monthly premiums for Tesla insurance users. A lawsuit was filed by an Illinois resident on behalf of all Tesla Insurance users, claiming that the sporadic and random collision warnings affected their safety score and increased their premiums. Tesla attempted to have the case dismissed, but a California judge denied the dismissal. The case will now proceed to a hearing early next year.