Broken Telephone: Class action launched against Tesla for false collision warnings affecting premiums

Chicago, Illinois — Like a really mundane scene out of Minority Report, a Chicago-area Tesla owner is suing his insurance company for increases on his premium based on false forward collision warnings reported by his vehicle.

That’s right, his car is both a snitch and a liar—a poor bedfellow for any Chicago resident.

Shawn Schneider launched his class action lawsuit in the Chancery Division of the Circuit Court of Cook County, Ill. and is representing all U.S. drivers who purchased usage-based insurance (UBI) for their Teslas from State National Insurance.

In the suit, Schneider alleges State National breached its contract, engaged in unfair conduct, violated the Illinois Consumer Fraud and Deceptive Business Practices Act, and unjustly enriched itself, by raising his premium rate based on false pretenses.

He further claims that the State National’s conduct violates Tesla drivers’ reasonable expectation that their insurance premiums would be based on their actual driving habits.

Both his Model 3 and Model S Teslas were insured under the company’s UBI plan which adjusts rates based on Safety Scores generated by Tesla’s driver app. The score includes forward collision warning alerts, as well as instances of hard braking, aggressive turning, unsafe following, and forced Autopilot disengagement.

Schneider said his Model 3 “has on numerous occasions experienced false Forward Collision Warnings when there was no danger in sight or any car in front.” He says that as a result of these false warnings, his Safety Score has decreased.

An excerpt of Schneider’s complaint reads as follows: “… [D]ue to the advanced and still in development technology that powers Tesla’s semi-autonomous driving features, including the safety features that Defendant’s Safety Score tracks, some of the features do not work as intended.

“Specifically, numerous Tesla drivers have reported suffering sporadic and random Forward Collision Warnings when there is no danger in sight or any car or object in front to signify the danger supposedly detected.”

The National Highway Traffic Safety Administration (NHTSA) has been aware of “phantom braking” being a present issue on Tesla vehicles since February. The NHTSA received 354 complaints of phantom braking in the previous nine months, the agency reported.

“NHTSA is aware of complaints received about forward collision avoidance and is reviewing them through our risk-based evaluation process,” a NHTSA spokesperson told The Washington Post in a statement.

“If the data show that a risk may exist, NHTSA will act immediately.

“The complaints allege that while utilizing the ADAS features including adaptive cruise control, the vehicle unexpectedly applies its brakes while driving at highway speeds. Complainants report that the rapid deceleration can occur without warning, at random, and often repeatedly in a single drive cycle.”

The suit seeks “an award of actual or compensatory damages in an amount to be determined at trial.”

State National Insurance is the underwriter for Tesla Insurance in several states, including Illinois. However, the suit does not mention Tesla Insurance.


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