Acquiring insurance on your Tesla electric vehicle is essential. Auto insurance protects you and your vehicle from many unforeseen circumstances.
However, insuring a Tesla is often more expensive than insuring another type of car. As Tesla uses advanced, costly materials and technology, repair prices are sometimes high. An insurance company may declare a Tesla a total loss instead of paying for expensive repairs. Learning more about the available options for insuring a Tesla can help you save money and protect your vehicle.
Car Insurance for Teslas
You can get car insurance for your Tesla like you would with another vehicle. A Tesla's high value means that purchasing additional coverage is a good idea. Insurance on a Tesla can protect you from liability after an accident with another vehicle, property, or pedestrian. It can also pay for repairs to your car.
To find the best deal, compare quotes from several car insurance providers. Tesla CEO Elon Musk said that as insurance premiums for Teslas were unreasonably high, the company started offering its own lower-priced insurance in 2019.
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Tesla wants to eventually become a one-stop provider for car services, including insurance. It can charge lower premiums because it understands how its vehicles operate and how people use them. The company has extensive knowledge of Tesla's safety features and automated driving technology. It also charges lower fees than traditional insurance companies.
Tesla Insurance offers basic insurance, comprehensive liability, and collision packages. Liability insurance covers injury or damage that you cause to another person's property. Personal injury protection insurance covers medical bills for you and your passengers after an accident, regardless of who caused it. PIP insurance is only a requirement in 14 states, but it's worth the added peace of mind in all locations.
Collision insurance covers damage to your Tesla from an auto accident. It usually costs more than collision insurance for other vehicles because Teslas require more expensive materials, making them costly to repair. Comprehensive insurance pays for theft and damage from bad weather. Insurance is available for Tesla owners in the following 12 states:
- Arizona.
- California.
- Colorado.
- Illinois.
- Maryland.
- Minnesota.
- Nevada.
- Ohio.
- Oregon.
- Texas.
- Utah.
- Virginia.
Buying a policy through the Tesla app is easy. Tap the profile picture icon in the top right corner and select "Get Tesla Insurance". If you have non-Tesla vehicles, you can also insure them with Tesla. The app will ask for:
- Your driver's license information.
- Your address.
- Your date of birth.
- The cars you want to insure.
- The names of additional drivers or vehicles to your policy.
- The coverage you choose.
After your purchase, you'll receive a confirmation email, insurance card and policy documents, and billing and payment details. You can update your payment method and make claims with the Tesla app.
Tesla offers insurance that uses real-time driving behavior. Features in your Model S, Model X, Model 3, or Model Y can monitor your driving behavior to determine your insurance premium. It tracks:
- The frequency of forward-collision warnings.
- Hard braking.
- Speeding while turning or changing lanes.
- How close you are to the vehicle ahead of you.
- How often you drive late at night.
- How often your Autopilot system disengages because you were inattentive.
Tesla uses this data to give you a safety score from 0 to 100, with new policyholders beginning with a score of 90. People with higher scores are safer drivers. Your safety score updates whenever you drive your Tesla. Without this technology, insurers calculate premiums using your credit score, gender, age, driving records, claim history, and other factors.
Insurance using real-time driving behavior isn't available in California. Although Tesla doesn't cover ride-sharing vehicles, the company is developing a separate policy for commercial vehicles.
The Cost of Insurance on a Tesla
Many insurance providers classify Teslas as luxury vehicles, charging high premiums. According to Insurance.com, coverage for a Model Y costs about $2,599 per year, and insurance for a Model S costs around $4,318. The insurance company with the lowest rate often depends on the Tesla model you drive. For example, GEICO offers the cheapest rates for the Model 3, and Progressive has the lowest prices for the Model X. Other companies with low premiums for Teslas include:
- AAA.
- Tesla Insurance.
- State Farm.
- Farmers.
- Allstate.
- Mercury.
Tesla Insurance Discounts
Tesla plans to offer discounts for drivers who haven't received tickets or had liability for accidents for three to five years. They may also offer:
- Multi-policy discounts.
- Loyalty discounts.
- Group rates.
- Mature driver improvement course discounts.
- Anti-theft device discounts.
For example, the Model S has GPS tracking, a Sentry Mode that keeps cameras and sensors on, and requires drivers to enter a PIN before starting the vehicle.
Special Coverages Available from Tesla
All Tesla insurance options include a Vehicle Automation Package. It contains autonomous vehicle liability insurance that protects you from property damage or bodily injury after a collision when your vehicle is in autonomous mode. Cyber identity fraud expense coverage protects you from digital identity fraud. The coverage limit is $15,000 per occurrence and $30,000 per insurance term.
Wall charger coverage pays for your manufacturer-issued electrical power charger if it becomes damaged or lost. The $3,000 limit doesn't cover factory defects or damage that you caused. Electronic key replacement coverage pays up to $500 for the loss of electronic car keys, including two incidents in each insurance period. Loan/lease gap insurance protects you if your car is stolen or damaged. It pays the balance of your lease or loan.
Ways to Save on Tesla Insurance
To reduce the cost of insurance on a Tesla, shop around and compare quotes from at least three companies. Rates can vary widely between insurers, and coverage from Tesla may not always be the cheapest option. It's also not available in every state. A smaller, regional insurance company could have better rates than larger insurers.
When you get quotes, ask about available discounts and consider raising your deductible. Many insurers offer discounts for bundling home and auto insurance. Discounts for paperless billing and careful driving are available, and choosing the more affordable Tesla Model 3 helps reduce your auto insurance expenses.
Insurance on a Tesla is often higher than coverage for other vehicles, but outstanding safety and advanced technologies make choosing a Tesla worth a higher premium.
Idalia Garcia is a licensed insurance agent with extensive knowledge of various insurance lines. She has more than 12 years of experience in auto insurance and 10 years in property insurance.
