Find the Cheapest Auto Insurance Quotes in Your Area
In August of 2019, Tesla began selling car insurance in the state of California. We’ve included prices from Tesla Insurance Services in our rate comparison below.
The average cost of car insurance for a Tesla is $4,352 per year, based on our research. However, the price of your policy will depend on the model and trim you choose, your location and driving history, and the amount of coverage you choose. Teslas are more expensive to insure than many luxury cars due to their high repair costs, which increases the cost of collision coverage.
Tesla's New Plans to Cut Insurance Costs for Drivers
In August of 2019, Tesla began selling its own insurance policies through a new company, Tesla Insurance Services. Insurance is currently available exclusively to Tesla owners in California, and we were able to glean many details about the forthcoming policies from the company's filing with the California Department of Insurance. Tesla hopes to address the higher costs Tesla owners often pay for car insurance, as well as offer some additional benefits not available from big-name insurers.
Tesla Insurance Services will be fronted by State National Insurance. State National will help coordinate the process of selling insurance, though the actual risk of writing insurance policies will not be taken on by State National.
Will Tesla's New Insurance Policy Lower Costs?
We compared the rates of Tesla's new insurance policy with rates from other top insurance companies in California, and found that their rates were below average statewide, but not the cheapest overall.
Tesla's policy sold through State National charges an average of $2,965 for a 30-year-old male driving a 2019 Tesla model 3. That's 22% cheaper than the statewide average for a new Model 3; however, GEICO, AAA of Northern California and Progressive all had more competitive rates.
State National and Tesla have said they have three strategies for reducing rates: reducing repair costs by providing service directly from Tesla service centers, adding an autopilot discount, and lowering the commission normally taken by an insurance company.
In our research, we found that one of the main reasons insurance for Tesla cars is so expensive is the high cost to repair the vehicle after a collision. To combat this, Tesla will "repair Tesla models internally at a fraction of what the industry is currently [charging]," which may lead to lower collision and comprehensive insurance rates. The rate filings corroborate Tesla's claim, though rates may change over time.
Tesla's new insurance also provides a rate discount on several portions of your overall premium based on your car’s level of autonomous driving capability. This discount applies to your policy's liability, MedPay, and collision coverages. It does not affect uninsured motorist or comprehensive coverages.
|Autonomy Level||Discount Amount||Definition|
|0||0%||No computer assistance - fully manual|
|1||5%||Car is able to control one specific function autonomously (such as steering)|
|2||10%||Car is able to simultaneously control speed and direction without driver input (current level)|
|3||15%||Safety-critical functions are shifted completely to the car|
|4||25%||Full-time autonomy for an entire trip (in certain environments)|
|5||30%||Full-time autonomy in any driving scenario|
Autonomy Level|Definition|Discount Amount _ 0|No computer assistance - fully manual|0% _ 1|Car is able to control one specific function autonomously (such as steering)|5% _ 2|Car is able to simultaneously control speed and direction without driver input (current level)|10% _ 3|Safety-critical functions are shifted completely to the car|15% _ 4|Full-time autonomy for an entire trip (in certain environments)|25% _ 5|Full-time autonomy in any driving scenario|30%
Contrary to Elon Musk's public statements, we didn't find any evidence in the filing with the California Department of Insurance to suggest that Tesla Insurance will use telematics to make any specific rate adjustments based on your driving habits. By comparison, insurers like Progressive and Root Insurance use plug-in telematics devices or smartphone apps to track your habits and change your rates accordingly.
However, drivers will be eligible for a good driver discount of 20% to 35% if they have no tickets or at-fault accidents in the past three to five years.
Tesla has reduced the commission rate on its insurance products when compared to a typical insurance company, which will also help to reduce the price Tesla owners pay for insurance.
Other Discounts Available From Tesla Insurance
Tesla's insurance will also include other discounts that are commonly available from other insurers. Eligibility will vary by driver, but possible discounts include:
- Multi-policy discount
- Good driver discount
- Persistency/loyalty discount
- Anti-theft device discount
- Mature driver improvement course discount
- Air bag discount
- Group rate
Special Coverages Available From Tesla Insurance
Besides discounts for Tesla owners, Tesla Insurance Services will provide a few coverages that Tesla drivers may find appealing enough to switch from another insurer. Most notably, every policy will include a Vehicle Automation Package, which includes:
- Autonomous vehicle owner liability: Covers any bodily injury or property damage that occurs while your car is operating in autonomous vehicle mode (level 2 or higher), up to the same limits of liability of when you are driving.
- Cyber identity fraud expense: Pays for the costs of digital identity fraud, up to $15,000 per occurrence and $30,000 per policy period.
- Wall charger coverage: Pays up to $3,000 for damage or loss to the electrical power charger supplied by your car's manufacturer and used to charge your car. This coverage doesn't apply if the damage is due to manufacturer defect or your own negligence.
- Electronic key replacement: Covers up to $500 per loss of the electronic keys supplied with your car. Limited to two claims per policy period.
Autonomous vehicle liability is the most unique coverage available from Tesla, and we haven't seen this coverage from any other insurer. However, it's unclear whether the policy covers damages incurred while using features like "Smart Summon," where a Tesla vehicle will autonomously drive itself to you (such as in a parking lot).
Other Coverages Available
The following coverages are not unique to Tesla insurance, though not every insurance company offers them.
- Roadside assistance coverage: Pays for the cost of towing and/or roadside assistance for your vehicle. Included on every policy.
- Loan/lease gap coverage: Covers the difference between what your car is worth and how much you owe on your lease or loan if your car is totaled or stolen. Optional coverage.
- Rental reimbursement: Covers the cost of a vehicle while yours is being repaired. Included on every policy, but only available if you also have collision and comprehensive coverage.
- Total loss deductible waiver: Pays your collision or comprehensive deductible if your car is deemed a total loss. Optional coverage.
How Much Does Insurance Cost on a Tesla?
The cost of auto insurance for a Tesla will vary significantly based on the model and trim you choose, as well as other factors that are normally taken into account when determining car insurance rates. These include your driving history, location and amount of coverage purchased.
Based on our research, the cheapest 2019 Tesla to insure is the Model 3, while the most expensive Tesla to insure is the Model X. Below, you can see an insurance cost comparison for each new Tesla model for a sample driver in California, based on quotes from the largest auto insurance companies: State Farm, GEICO and Progressive.
Tesla's Roadster, the company's first model car, wasn't included in our analysis as it's been out of production for the past few years, and the updated vehicle won't be available for sale until 2020.
The cost of Tesla insurance changes by model, but owners should also take into account the potential impact of different trims on auto insurance rates when choosing their vehicle. Not all insurers offer different quotes by trim. But for insurers that do take this into account, the difference in vehicle cost, acceleration and other vehicle features will translate into different premiums. For example, a Tesla Model S with 75D trim may have lower insurance rates than the same model car with P100D trim. This is because the P100D vehicle costs more to replace, as the starting cost is approximately $50,000 higher, and it accelerates from 0 to 60 mph in just 2.5 seconds (as opposed to 4.2 seconds).
Which Companies Offer the Cheapest Insurance for a Tesla?
In our comparison of the largest insurers, GEICO offered the cheapest auto insurance rates to insure a Tesla. However, the cheapest insurer for your policy will differ based on the model, plus your location and driving history. GEICO, for example, offered the cheapest car insurance for a Tesla Model 3, but its rates were 19% greater than Progressive's rates for a Model X.
Some auto insurance companies have specified that they typically offer higher or lower auto insurance quotes to Tesla owners. These differences in underwriting are typically based upon safety data that insurers have collected. Root Insurance, for instance, gives a discount if your Tesla has Autosteer functionality. That's because a National Highway Traffic Safety Administration (NHTSA) report correlated the use of this feature with lower crash rates. AAA, on the other hand, raised its auto insurance rates on Tesla vehicles specifically. This was because Tesla Model S and Model X vehicles had higher claim frequencies and above-average claim severities when compared to other vehicles in their class.
In order to make sure you get the most affordable Tesla insurance rates, we recommend comparing quotes from at least three different insurers. Researching those that offer discounts specifically for Tesla vehicles or cars with semiautonomous technology like Autopilot can help to save you a significant amount on premiums.
Though Tesla owners are able to purchase car insurance from any insurer they choose, Tesla has partnered with Liberty Mutual to provide customized insurance policies. The program, InsureMyTesla, is available to both new and existing Tesla owners.
InsureMyTesla doesn't offer unique coverage in the sense that a policy covers different situations or offers greater coverage limits than you could find through a different insurer. However, the underwriting of the policies takes into account all the technology and safety features that Tesla models include. Unfortunately, this doesn't mean Tesla's insurance policies are typically cheaper than those from other insurers. Many Tesla owners find better auto insurance rates elsewhere. We recommend you compare quotes from InsureMyTesla against those from other top auto insurance companies to find the best rates for the coverage you choose.
Why Are Teslas so Expensive to Insure?
The largest contributor to the expensive cost of Tesla insurance is collision coverage, which accounts for between 57% and 78% of the total cost of coverage.
|Model 3||Model S||Model X|
|Total annual premium||$3,864||$3,876||$2,893|
|Vehicle damage (collision/comprehensive)||$2,928||$3,007||$1,648|
Teslas are particularly expensive to insure for collision damage due to their high repair and maintenance costs, which are greater than those for other luxury vehicles. This is due to several reasons, such as:
- The cars are repaired at a limited set of Tesla-approved body repair shops. The training and equipment to become qualified means significant costs are incurred.
- Electric cars are already more expensive to repair, and therefore insure, on average.
- The Model S aluminum frame is more expensive and difficult to repair than a steel frame.
For all these reasons, the cost to repair a Tesla, even for a minor fender bender, can easily reach several thousand dollars. And, as the cars integrate more custom parts and technology, the cost per collision may continue to rise. So, even though the technology built into Tesla cars aims to reduce crashes, as data indicates its Autopilot feature does, insurers have to take into account the size of a claim when an accident does occur.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.