Elon Musk teased an insurance foray during Tesla's earnings

This is an excerpt from a story delivered exclusively to Business Insider Intelligence Transportation & Logistics Briefing subscribers. To receive the full story plus other insights each morning, click here.Automaker Tesla is planning to introduce an insurance product in the coming weeks, CEO Elon Musk said on the company's Q1 2019 earnings call on Wednesday. Though Musk wasn't forthcoming with many details on the company's plans for the product, he claimed that it “will be much more compelling than anything else out there” for Tesla owners.Here's what it means: Tesla seems set to realize long-standing plans to enter the insurance market and offer a product to underwrite the vehicles it sells, removing another middleman from its equation.Teslas have always been a question mark for insurance as they are equipped with semi-autonomous features. There were rumors of Tesla-specific insurance plans for Hong Kong and Australia more than two years ago. More recently, some adverse figures have been reported highlighting the high cost of insurance for Teslas as well as apparently excessive numbers of claims.This new insurance product will apparently take advantage of data Tesla gathers from the cars' built-in sensors which enable Autopilot. Musk said that Tesla “will certainly incorporate that information into the insurance rates ... we have direct knowledge of the risk profile of customers and based on the car, and then if they want to buy Tesla insurance, they would have to agree to not drive the car in a crazy way. Or they can, but then their insurance rates are higher.” Tesla would be able to offer more personalized pricing for drivers based on its proprietary data. It could also incorporate use of Autopilot semi-autonomous features into its product, though that's not accounted for in its plans thus far.The bigger picture: While Teslas have posed difficulties for insurers, the company's need for its own insurance product highlights the contradiction inherent to its approach to the autonomous car space.Individually owned vehicles with semi-autonomous features (and full autonomy in the future) are difficult for insurers to assess because various parties will contest how well the systems perform. Currently, autonomous features in cars like Tesla's are only factored into insurance rates as safety features; the driver is responsible for overseeing the operation of a vehicle and is ultimately liable for the safe operation of a car. As systems improve and regulations change, though, consumers could be in position to abdicate that responsibility to the car's guidance system. This creates the question of who is ultimately responsible in the case of an accident, as Tesla provides the autonomous system powering the car, but does not own the car itself. Liability concerns are one of the reasons that ride hailing and autonomous vehicles (AVs) are so closely linked. As part of ride-hailing fleets, the operator insures all the AVs in use, eliminating any confusion over liability from the consumer's perspective. But negotiating rates with an insurer based on the risk an autonomous system can be a challenge even for ride-hailing operators. Waymo has addressed the issue by partnering with insurance startup Trov in late 2017 prior to starting its tests in Arizona.Interested in getting the full story？ Here are two ways to get access: 1. Sign up for the Transportation & Logistics Briefing to get it delivered to your inbox 4x a week. >> Get Started2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Transportation & Logistics Briefing, plus more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now