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Tesla Car Insurance Review & Complaints: Auto Insurance

Tesla car insurance is available in California and claims to have Tesla car insurance rates 20% lower than average car insurance rates. In California, Tesla car insurance quotes are $61.48/mo lower than average car insurance costs. Our Tesla car insurance review finds that the savings from our Tesla car insurance comparison come from Tesla's extensive safety features.

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Eric Stauffer is a former insurance agent and banker turned consumer advocate. His priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best...

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UPDATED: Sep 22, 2020

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Key InfoProvider Specifics
Year Founded2019 (insurance)
2003 (company began)
Current ExecutivesElon Musk
Number of Employees40,000+
Income2-5 billion dollars per year
Headquarters LocationPalo Alto, California
Phone Number1-844-34-TESLA
WebsiteTesla.com
Best ForTesla owners
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People with specialty cars, like classics and antiques, you can get specialty car insurance. Electric cars are definitely a specialty vehicle, but there hasn’t been equivalent specialty insurance available for them.

To compound the matter, as vehicles with more and more autonomous features have made an entry onto the scene, there’s been a question over how insurance will work. It’s been muddy water. Who is responsible when an autonomous vehicle is in an accident?

Tesla jumped right into that gray area and they’re answering the question. Who better to insure their own specialty vehicles? They know every in and out of their electric, driver assisting vehicles.

Their coverage is brand new, but it looks promising.

Tesla’s History

On July 1, 2003, Tesla was born. The next year, Elon Musk invested over 6 million in the company and became chairman of the board. In 2008, the first Roadster was manufactured and production began.

In June of 2009, Tesla became a publicly-traded company. Their first semi-autonomous vehicles hit the road in 2015. And finally, in August of 2019, they started offering car insurance for Tesla vehicles.

Throughout these years of history, there have been ups and downs. There have been lawsuits and controversy. Stocks have soared and plummeted. Stable is not a word you’d use to describe the company.

However, as unlikely as it seems, they’ve rebounded from rock bottom every time and landed on their feet. And there’s something about their ability to do that, that makes you want to see what happens next.

Tesla’s Position for the Future

There’s not a clear answer to this question. The company as a whole has seen its share of ups and downs in its brief history. Their insurance arm is so new, there isn’t a track record to look back on.

There are going to be problems in the near future, just because any new company has to work through problems. You don’t know what issues will arise until they happen. Then Tesla will deal with it.

Because they have the financial backing of State National Insurance Company, insurance customers can rest assured that they will be adequately protected financially should they make a claim.

State National has an AM Best rating of A, so their financial stability looks excellent.

Though some would argue, their position for the future looks bright. They’re an innovative company and they’ve overcome adversity enough times that they should be able to do it again if the need arises.

Tesla’s Online Presence

Tesla has a website, of course, but you can’t get a quote on it. You need to call their phone number, and then they claim you can get a quote in under a minute. The process is so quick because once you tell them your VIN, they can pull up all your information.

As a Tesla owner, you have access to the Tesla app. The app will have everything you need as an owner, and you can also access your Tesla Insurance account through it.

Tesla’s Commercials

There’s a certain genius to Tesla’s marketing. They get people. And as shocking as it is, they have engaged more people through their organic social media marketing than any of their competition has engaged through paid social media marketing marketing.

That’s right, Tesla spent zero dollars and managed to do a better job promoting their vehicles than companies paying big bucks.

Tesla’s Community Involvement

Tesla’s commitment to community centers very strongly on their customers. They focus on keeping their customers happy and going above and beyond what is expected.

They also have a strong commitment to renewable energy and zero emissions, making the world better for every individual.

Tesla’s Employees

With all the ups and downs the company has weathered, employees have been hired and employees have been fired. There are some employees that are very happy with their jobs, and there are others that are bitter about how they’ve been treated.

  • 52 percent of employees would recommend working at Tesla to a friend
  • 66 percent of employees approve of CEO, Elon Musk
  • 3.3 out of five stars rating from employees

Common employee complaints are the number of hours they have to work. A common pro cited by employees is how much you learn working there.

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What Sets Tesla Apart

Tesla only makes electric vehicles. They’re committed to renewable energy. They aim to reduce emissions to zero. Let’s take a deeper look at Tesla’s safety features because that’s really where Tesla stands out.

Driver Assistance

According to the National Highway Traffic Safety Administration (NHTSA), there are levels of autonomy related to vehicles. Here’s their standard.

Autonomous LevelTitleDescription
Level 0 No AutomationThe driver performs all driving tasks
Level 1Driver AssistanceVehicle is controlled by the driver but some driving assist features may be included in the vehicle design.
Level 2Partial AutomationVehicle has combined automated functions, like acceleration and steering but the driver must remain engaged with the driving task and monitor the environment at all times
Level 3Conditional AutomationDriver is a necessity, but is not required to monitor the environment. The driver must be prepared to take control of the vehicle at all times with notice.
Level 4High AutomationThe vehicle is capable of performing all driving functions under certain conditions. The driver may have the option to control the vehicle.
Level 5Full AutomationThe vehicle is capable of performing all driving functions under all conditions. The driver may have the option to control the vehicle.
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Tesla is one of the companies leading the way in driver assistance technology. Their vehicles that are on the market right now are level two.

Their claim is that these driver assisting technologies make the cars safer, and that’s why they will be able to offer such low prices to insure their vehicles. Here’s how their autopilot system works:

  • Eight external cameras
  • Radar
  • 12 ultrasonic sensors
  • Onboard computer

Older models made between 2014 and 2016 have just one camera and less-powerful radar and ultrasonic sensors.

They’ve even taken your pet’s safety into consideration.

Customer Service

They haven’t been offering car insurance for long enough to produce any reliable data as far as customer satisfaction goes. But they have vehicle customers that are very satisfied.

If their customer service commitment carries over from vehicle sales to insurance sales, they will likely have very happy customers.

Tesla customers topped Consumer Reports list of most satisfied owners. They topped the chart for the past three years. This fact is surprising when you consider that Consumer Reports rated the vehicles themselves as less-than-reliable.

What this dichotomy indicates is that Tesla is able to keep their vehicle owners happy even when the vehicles have problems.

Cheap Car Insurance Rates

Once you get your quote for Tesla Insurance, compare to these average rates of some of the most popular car insurance companies in California.

Average Car Insurance Rates in California

Tesla insurance is available in California. It’s only available for Tesla vehicles. It’s definitely a niche market. The company plans to expand its insurance to other states in the future.

They claim their rates are 20 percent lower than the competition and in some cases up to 30 percent lower.

Even though they only offer coverage in California, let’s hypothetically look at how much 20 percent would save you if they offered coverage in your state (which they likely will, eventually).

StateAverage Car Insurance Annual PremiumTesla's Rate at 20% SavingsPotential Savings with Tesla Insurance
Alabama$3,566.96$2,853.57$713.39
Alaska$3,421.51$2,737.21$684.30
Arizona$3,770.97$3,016.78$754.19
Arkansas$4,124.98$3,299.98$825.00
California$3,688.93$2,951.14$737.79
Colorado$3,876.39$3,101.11$775.28
Connecticut$4,618.92$3,695.14$923.78
Delaware$5,986.32$4,789.06$1,197.26
District of Columbia$4,439.24$3,551.39$887.85
Florida$4,680.46$3,744.37$936.09
Georgia$4,966.83$3,973.46$993.37
Hawaii$2,555.64$2,044.51$511.13
Idaho$2,979.09$2,383.27$595.82
Illinois$3,305.48$2,644.38$661.10
Indiana$3,414.97$2,731.98$682.99
Iowa$2,981.28$2,385.02$596.26
Kansas$3,279.62$2,623.70$655.92
Kentucky$5,195.40$4,156.32$1,039.08
Louisiana$5,711.34$4,569.07$1,142.27
Maine$2,953.28$2,362.62$590.66
Maryland$4,582.70$3,666.16$916.54
Massachusetts$2,678.85$2,143.08$535.77
Median$3,660.89$2,928.71$732.18
Michigan$10,498.64$8,398.91$2,099.73
Minnesota$4,403.25$3,522.60$880.65
Mississippi$3,664.57$2,931.66$732.91
Missouri$3,328.93$2,663.14$665.79
Montana$3,220.84$2,576.67$644.17
Nebraska$3,283.68$2,626.94$656.74
Nevada$4,861.70$3,889.36$972.34
New Hampshire$3,151.77$2,521.42$630.35
New Jersey$5,515.21$4,412.17$1,103.04
New Mexico$3,463.64$2,770.91$692.73
New York$4,289.88$3,431.90$857.98
North Carolina$3,393.11$2,714.49$678.62
North Dakota$4,165.84$3,332.67$833.17
Ohio$2,709.71$2,167.77$541.94
Oklahoma$4,142.33$3,313.86$828.47
Oregon$3,467.77$2,774.22$693.55
Pennsylvania$4,034.50$3,227.60$806.90
Rhode Island$5,003.36$4,002.69$1,000.67
South Carolina$3,781.14$3,024.91$756.23
South Dakota$3,982.27$3,185.82$796.45
Tennessee$3,660.89$2,928.71$732.18
Texas$4,043.28$3,234.62$808.66
Utah$3,611.89$2,889.51$722.38
Vermont$3,234.13$2,587.30$646.83
Virginia$2,357.87$1,886.30$471.57
Washington$3,059.32$2,447.46$611.86
West Virginia$2,595.36$2,076.29$519.07
Wisconsin$3,606.06$2,884.85$721.21
Wyoming$3,200.08$2,560.06$640.02
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Keep in mind this chart is just hypothetically based on the 20 percent savings on the state average. Tesla Insurance is not available nationwide, and rates will certainly vary.

Tesla hypothetical Rates nationwide

States Where Tesla Insurance Is Available

Tesla Insurance is available in California, only. They plan to expand into other states in the future. Which states will likely be next? Matthew Edmonds, head of Tesla Insurance said:

“Find the states where the population is, those will be the states we’ll be going to.”

When you examine state populations, the five biggest after California are the following:

  • Texas
  • Florida
  • New York
  • Pennsylvania
  • Illinois

When you look at electric vehicles sales in each state, here are the top five after California for 2017 and 2018:

  • New York
  • Florida
  • Washington
  • Texas
  • New Jersey

Based on those two lists, you shouldn’t be surprised if Tesla announces that they’ll start offering insurance products in New York or Florida next.

When you look at the number of electric vehicles in California, you can see why Tesla Insurance launched there.

In 2018, there were 153,442 electric vehicle sales in California. To put that number in perspective, the state with the next highest electric vehicle sales was New York with 15,752 sales. That’s about 10 percent of what was sold in California.

Since Tesla insurance is only available in California, let’s dig deeper into car insurance there.

Top California Companies by Market Share

As you can see, Tesla is not one of the 10 biggest companies. It’s brand new and it only offers coverage for Tesla vehicles. It won’t be taking over the general market by storm.

See that 20.5 percent section that says “other?” Tesla auto insurance makes up just a small percentage of that section.

Car Insurance market share CA

Average Male vs Female Car Insurance Rates

California is one of the few states that doesn’t allow gender to be considered in car insurance rate calculation.

Another factor that California has taken out of insurance is your credit score. Good or bad, your credit score will not affect your insurance rates.

Average Commute Rates

California car insurance rates by commute

You can see that all car insurance companies in California charge more for longer commutes. That’s because they have to.

California has laws that require car insurance companies to consider commute and annual miles into their rates. So, your rates with Tesla will be higher or lower depending on how many miles you put on.

Coverage Level Rates

The more car insurance you have, the higher the rates you pay. It just makes sense. As with other companies, Tesla’s rates will be higher and lower based on how much coverage you purchase.

Driving Record Rates

Your driving record gives a window of insight into what kind of a driver you are. If you have a couple of accidents and a speeding ticket on your record, you’re a riskier customer to an insurance company.

There’s a higher likelihood that they’ll have to pay a claim on your account. More risk equals higher rates.

To give you an idea of how much your driving record affects your rates, check out this chart featuring some of the larger insurance companies in California:

Car insurance rates in CA by driving record

Tesla’s Low Rates Explained

Teslas are more expensive to insure than other similar vehicles. This chart from the Insurance Institute for Highway Safety (IIHS) compares the claims costs of electric vehicles. The zero-percent line is the average cost of claims for non-electric vehicles.

Tesla claims vs other electric vehicles

The Tesla Model S has more claim frequency, claim severity, and overall losses than other electric vehicles, the Nisan Leaf, and traditional vehicles.

So, how can Tesla offer coverage for what they claim is 20-30 percent lower than the competition? One reason is their faith in Tesla’s safety features.

If that’s their reason, you may still be wondering how they can do that. The safety features haven’t stopped the overall losses for the Tesla Model S to be lower.

Faith in Tesla Vehicles’ Safety

Here’s a simple explanation of how insurance companies work. They charge a premium to take on risk. They keep the premium low enough to entice customers but high enough to cover their risk and pay their employees. It’s an art to find appropriate rates.

One thing that insurance companies look at is the safety features of the vehicle they’re going to insure. They’re looking at the exact same safety features that Tesla is looking at.

Here’s the difference. The majority of insurance companies say there hasn’t been enough data collected to prove that the safety features on a Tesla actually reduce the likelihood of claims.

Tesla Insurance, on the other hand, trusts the safety of its vehicles and is willing to bet on (or insure, in this case) it.

Still, which you consider the chart above and see that Teslas claims are higher, you may be wondering how they can promise low rates.

Repairs at Tesla Repair Shops

Tesla Insurance plans to work closely with Tesla repair shops which, in theory, should make repairs less costly because the shops specialize in Tesla vehicles and know the ins and outs of their repairs.

Low Commissions

Because they’re not hiring outside agents, Tesla claims they will be able to save money on the commissions. Other insurance companies have to pay commissions to agents for policies sold. Tesla will not.

Low Risk of Theft

Teslas are hard to steal, so there’s a much lower risk of needing to file a comprehensive claim for a stolen vehicle.

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Coverage Offered

Tesla will offer coverage for Tesla vehicles. Their coverage options will exceed the state-required minimum insurance requirements. Many car insurance companies will not let you purchase the bare minimum the state requires because it’s not sufficient to protect your assets.

Teslas are expensive, and owners will tend to need full coverage to protect their investment and not just their liability.

Tesla Insurance will offer liability, collision, and comprehensive. They will also offer special coverages that are unique to the needs of their vehicles and other optional coverages.

Tesla’s Bundling Options

Tesla only offers car insurance, so you won’t be able to get a bundling discount for insuring your home and auto. You will, however, be eligible for a discount if you insure more than one Tesla.

Tesla’s Programs

Tesla has an extremely loyal customer base because they treat their customers well. Also, they’re happy with the safety features of their Teslas.

There are no franchises. Customers deal directly with headquarters to order their Tesla. And because they order directly through Tesla, their customer information is all available to Tesla Insurance when they call for a quote. That’s why it’s so easy to get a quote.

When you purchase a Tesla vehicle, you set up an online account for your vehicle. Once you get your insurance policy activated, you can access it and make changes in your Tesla account under “my policy.”

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How to Make a Claim

To make a claim, you will need to call the number on your insurance card. You will be assigned a claims specialist who will be your point of contact through the entire claims process.

Because Tesla knows Tesla best, when you have insurance through them, you’ll have access to Tesla Body Repair Centers. These shops can more quickly provide an assessment and work with an adjuster.

Pros and Cons

There are legitimate concerns to consider. We’ll address a few of them:

Vehicle Data Use in Rates

Tesla has data on all its vehicles. Think camera data, braking data, acceleration data, everything. So far, they say that they will use their data as a whole to determine rates by state. In other words, they will look at the overall trends but not individual reports from individual vehicles.

That’s how they’re using data in California, currently. But a senior executive said that the laws in each state and the authorization of drivers will determine what data they use as they expand their service outside of California.

Small Insurance Customer Base

Another concern is that in the world of insurance, a greater and more widespread customer base equals better risk management. And Tesla Insurance does not have a big, widespread base. Think of it like this:

You started a brand new insurance company and had five customers in total. They paid a combined $10,000 a year in premiums, for five years. Things are looking good for your company. Your customers have made no claims and you just made $50,000.

And then through a stroke of bad luck, two of them were in accidents that resulted in major injuries. One made a claim for $40,000, and the other made a claim for $25,000. Suddenly your company is no longer solvent.

If you had a bigger base of customers to share the risks, this type of scenario is not as likely to happen.

Tesla has a small customer base. Who’s backing their risk? While they haven’t announced this, the California Department of Insurance lists  State National Insurance Company which is part of Markel Corp as Tesla’s underwriter.

This partnership gives Tesla Insurance much better financial backing and security than if they were completely independent.

The Company Has Experienced Many Hardships

It’s a fact that the company has its share of ups and downs as we discussed earlier, but it has always bounced back. That fact needs to be considered as equally important if not more important than the fact that they hit rock bottom several times.

ProsCons
Understanding of the unique needs of Tesla ownersOnly available in California
Strong history of customer satisfaction for vehicle ownersCan't get an online quote
Lower insurance costsNew company, so there will be kinks to work out
Financial back from Markel CorpNo multiple lines of insurance available
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The Bottom Line

Based on the genius of Elon Musk and the reputation of Tesla, it’s likely that Tesla Insurance will have some issues in these early stages but they will probably be able to work through them and grow and become the go-to insurer for Tesla vehicle owners.

If you own a Tesla and live in California, you should take the time to call 1-844-34-TESLA to get a quote. Then you should compare that to your current policy and quotes from other providers to see if you really can save 20-30 percent.

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FAQs

Not every question has an answer, especially with a company that has just launched a brand new service. However, we will explore some of the most frequently asked questions to help you better understand what Tesla Insurance offers.

If I bought a used Tesla, can I still get Tesla Insurance?

If you live in California, and your models is a Model S, Model X, Model 3, or Roadster (in other words if you own a Tesla), the answer is yes.

 – Does Tesla cover ridesharing?

No. They do not cover you when you’re driving in a commercial capacity. Elon Musk, Tesla CEO, said in a tweet, “Lyft/Uber/taxi drivers are expert Tesla advocates. Thanks for your support!!”

So even though Tesla Insurance doesn’t offer ridesharing coverage, these major ridesharing companies are supportive and experience insurance Teslas when providing their services.

Do I have to get Tesla Insurance if I purchase a Tesla vehicle?

No. You may purchase from a provider of your choice.

Are Teslas expensive to insure?

Yes, they tend to be more expensive to insure than an average vehicle.

Can I get a quote if I don’t have a Tesla?

You cannot get a quote if you don’t have a Tesla unless you have ordered one. If you have already agreed to purchase a Tesla vehicle, you can get a quote started before you have the vehicle physically in your possession.

Does Tesla insurance non-Tesla vehicles?

No.

About Eric Stauffer

Author: Eric StaufferI am a former insurance agent and banker turned consumer advocate. My priority is to help educate individuals and families about the different types of insurance they need, and assist them in finding the best place to get it.

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