Tesla Insurance: An In-depth Owner’s Guide (2019)
Tesla’s cars are terrific, safe, eco-friendly, fast, luxurious, technologically advanced, and for what they offer, quite affordable. However, Tesla insurance can cost you an arm and a leg. That’s why we created this guide. It will help you navigate all the challenges behind finding high-quality and affordable coverage for your Tesla.
First, we’ll explain how Tesla’s own insurance plans work. Then we’ll provide a quote comparison for the Tesla Model 3, Model S, and Model X. After that, you’ll find rankings of the major US insurers in the relevant departments, such as discounts, optional coverages, financial strength, and customer service, to determine the three best companies. Finally, you’ll see a list of the best tips and hacks to get the most out of your coverage. So dive right in to find the perfect protection plan for your Tesla.
What Is InsureMyTesla?
It’s an insurance program developed jointly by Tesla and Liberty Mutual to provide coverage for Tesla’s vehicles. It doesn’t offer any options or limits that you can’t find elsewhere, but it does deliver a combination of coverages custom-tailored for Tesla owners. Besides the standard mandatory and optional coverages, such as liability, comprehensive, and collision, it includes the following:
New Car Replacement (optional in some states) – This provides a brand new identical Tesla if you suffer a total loss within the first year of ownership.
Guaranteed Rate for One Year – Your rates won’t change from the first effective date of your policy unless your underwriting profile changes significantly.
Roadside Assistance (optional) – Your Tesla car insurance policy can also cover towing expenses if your car suffers a mechanical breakdown.
Manufacturer’s Replacement Parts – This guarantees that your Tesla will be repaired only with original parts if they’re available.
Rental Vehicle Reimbursement (optional) – While your Tesla is getting repaired after a covered claim, this coverage will pay the expenses of a rental car.
Claims Valet Service™ (available only in some states) – This is used to arrange the drop-off of the rental car you’ll be driving while you’re waiting for your Tesla to get fixed.
While InsureMyTesla is certainly worth considering, it’s not the cheapest, nor is it necessarily the best coverage for your Tesla. Depending on your profile and where you live, some companies may provide lower rates or more reliable customer service.
Tesla’s New Insurance Project
We should also mention that Tesla is working on an entirely new insurance project together with State National Insurance. The program should adjust prices to your profile, which will be based on your use of Autopilot and other driving habits. The more safely drive, the lower the rates you’ll receive. As Elon Musk said, “It will be more compelling than anything else.”
However, not everyone is optimistic about the new Tesla auto insurance platform. Warren Buffet, the CEO of Berkshire Hathaway (which owns Geico) said,
“I would bet against any company in the auto business being any kind of an unusual success. The idea of using telematics in terms of studying people’s driving habits, that’s spreading quite widely. It is important to have data on how people drive, how hard they brake, how much they swerve… But I don’t think the auto companies will have any advantage to that. I don’t think they’ll make money in the insurance business.”
Looks like we’ll have to wait for Tesla to roll out its new insurance system before we pass any judgment. Until then, InsureMyTesla is undoubtedly worth a try. We can at least confirm that Warren Buffet is correct in claiming that using telematics devices is nothing new in the auto insurance industry. Various insurance companies, such as Geico, State Farm, Progressive, Nationwide, and Travelers, rely on a GPS device or a mobile app to track driving habits.
Are Teslas Expensive to Insure?
Yes. According to recent independent research, Teslas are among the most expensive cars to insure in their price range.
For instance, Tesla’s Model S and Model X ranked first and second on the list of the 25 most expensive vehicles to insure by 247wallst.com. Furthermore, the Model S was the 15th most expensive on a similar list by Insure.com.
Finally, one of the most prominent US car insurers, AAA, indicated in 2017 that Tesla car insurance should cost more.
AAA studied the data by the Highway Loss Data Institute and found that Tesla owners file claims more frequently and that those claims can be very expensive.
Because of that, AAA increased its rates for the Model S and Model X by up to 30%. Anthony Ptasznik, the chief actuary of AAA, said, “Looking at a much broader set of countrywide data, we saw the same patterns observed in our own data, and that gave us the confidence to change rates.”
Tesla Motors disputed those claims by pointing out that the Tesla Model 3 insurance cost, as well as that of the Tesla Model X, were overblown because they were compared to vehicles that aren’t remotely similar.
However, before Tesla owners start bashing AAA for high premiums, they should at least know that the company disclosed their pricing strategy.
Insurers such as State Farm and Geico confirmed they use such data in calculating premiums, but they didn’t reveal how that affected their rates for Tesla’s models.
Why Is Tesla Insurance so Expensive?
The main reason seems to be high repair costs. Electric cars are more expensive to repair to begin with, but Teslas are notorious for costing big bucks to fix.
There are multiple reasons for this. First, the Tesla Model S and Model X’s bodies are made entirely of aluminum, while the Model 3 has a body made of aluminum alloy. While lighter, cars with aluminum bodies are more complicated and expensive to repair. The Tesla Model 3 insurance cost may not suffer as much, but owners of the Model S and Model X will have to pay more for the privilege of driving a feather-light car.
Additionally, Teslas can only be fixed at a limited number of Tesla-approved body repair shops. Those facilities require advanced equipment, and staff must go through extensive training, which increases the prices substantially. As automotive industry analyst Maryann Keller said:
“There’s a reason why Tesla has one of the highest insurance rates; it’s because it’s impossible to fix. You’ll look at them, and you’ll say, ‘There’s nothing wrong with the car. It’s got a small dent.’ Well, that little dent may cost $15,000 to fix—or more.”
Nevertheless, you can opt out of certain coverages that protect your Tesla, such as collision and comprehensive. That way, you’ll substantially reduce your overall Tesla insurance cost, but then you’ll only be covered if another driver caused the accident.
If a driver with minimum limits or no insurance at all hits you, you’ll have to sue them unless you carry underinsured motorist coverage property endorsement.
That’s a lengthy process that’ll cost you many nerves even if the settlement is in your favor.
How Much Does Tesla Insurance Cost? (Carsurance Study)
We didn’t just settle for relying on other studies; we commissioned our own to determine how much it costs to insure a Tesla in 2019.
Carsurance Sample Quote
Our reference driver was a 40-year-old single male with a clean driving record and a good credit rating. The limits we choose were $50K/$100K for bodily injury and $50K for property damage. We also selected uninsured motorist coverage for the same amount, as well as collision and comprehensive coverage, each with $500 deductibles. The rental car reimbursement limits we choose were $30/$900, and our annual mileage was 10,000. The primary use of the car was to travel to work. Our reference models were the 2018 Midrange Model 3 and the 2018 90D Models S and X.
While we found that Tesla insurance is typically somewhat high, there was nothing outrageous in the prices we were quoted.
The average monthly premium was $220 for the Model 3, $272 for the Model S, and $282 for the Model X.
Although the average value may seem high, there’s no reason to panic. We found reasonably priced Tesla Model 3 insurance quotes with various companies that excelled in financial strength and customer service. Those owning either a Model S or Model X will have to spend a little bit more, but they can still find affordable companies, such as Wawanesa, Geico, or Ameriprise. Check below for the full details:
How Do Tesla Insurance Rates Vary by Model?
Tesla Model X Insurance
While Tesla’s Model X was the most expensive to insure on average, some of the best companies we tested offered quite affordable rates. For instance, Progressive provided a six-month policy for only $125 per month, lower than the company’s price for the Model 3. Overall, our top picks for Model X owners are Progressive, Geico, and Ameriprise.
We would also suggest you give Wawanesa a shot if you live in California. While its website prompted us to talk with an agent to finalize our Model X quote, the company provided affordable prices for the Model S and Model 3. Additionally, we found that it’s the best insurer in California in our state-wide study.
Tesla Model S Insurance
Our top three Tesla insurers are also the cheapest for the Model 3. Furthermore, there’s really no reason to look past Progressive, Ameriprise, and Wawanesa. The last two perform outstandingly in customer service, while the first one provides polished online tools, solid financial strength, and a variety of optional coverages. However, if you want an insurer with the absolute best financial strength, consider Geico or State Farm.
Tesla Model 3 Insurance
Owners of the least expensive Tesla will have many options to choose from. We think that Wawanesa is the best option if you’re in California or Oregon, while Ameriprise is a close second. Besides these two, Geico, Travelers, and Progressive are all worth considering. However, their customer service scores are lower than those of our top picks.
The Best Tesla Insurance Options
#1. Ameriprise Auto Insurance
Ameriprise is available in 32 US states, including California, New York, and Illinois. As we noted in our company review, this insurer offers outstanding customer service. This is confirmed by the 2018 J.D. Power regional rankings, where Ameriprise holds first place in CA, with a full five stars.
Ameriprise is also quite affordable, with a particularly low Tesla Model S insurance cost. Additionally, the company offers various optional coverages and promotions. For instance, those who buy Ameriprise’s insurance through Costco can get bonus discounts and perks such as free roadside assistance.
The company’s financial strength isn’t too shabby either. Ameriprise’s A. M. Best rating is “A” or “Excellent.” While not as good as Geico’s, State Farm’s, or Auto-Owner’s, there’s no reason for an average customer to worry about the company’s ability to pay claims.
Overall, the combination of low prices and exceptional customer service that Ameriprise offers, coupled with its widespread availability, leave no doubt that the company is the best insurance for Tesla cars in the US.
Choose Ameriprise for affordable prices, outstanding customer service, and its various benefits for Costco customers.
Look elsewhere if you want an insurer with the best financial strength, or if Ameriprise is unavailable in your area.
#2. Wawanesa Car Insurance
Wawanesa’s auto insurance policies are available only in Oregon and California, but Tesla owners in these states should definitely give it a chance. For starters, it’s quite affordable. In our quote comparison, Wawanesa was the cheapest insurer for the Model 3 and the Model S (we couldn’t obtain a Model X quote since the system prompted us to talk with an agent).
When you’re looking for the best insurance for your Tesla, it’s also essential to consider your potential new insurer’s financial strength. Wawanesa may be a smaller insurer, but its A. M. Best rating—“A” or “Excellent”—confirms the company’s financial stability.
On top of that, Wawanesa took second place in the California region in J.D. Power’s 2018 customer satisfaction rankings. It scored four out of five stars, and the only two companies that ranked higher were USAA and Ameriprise.
Overall, Wawanesa has no glaring weaknesses, and it would be our number one option if it weren’t for its limited availability.
Choose Wawanesa for affordable rates for Teslas and reliable customer service.
Look elsewhere if you aren’t from CA or OR, or if you want the best financial strength.
#3. Progressive Car Insurance
If you’re looking for a proven insurer that offers low Tesla insurance rates, give Progressive a chance. The company is the third-largest insurer in the US by market share, meaning its products are widely available. Furthermore, if your driving record is far from perfect, Progressive won’t overcharge you like some other companies would. Progressive started out as a niche company for high-risk drivers, and to this day, it still caters to their needs.
Even regular customers will benefit from Progressive’s low rates. The company offered very competitive prices, particularly for the Model X and the Model S. You can add excellent financial stability to the list of Progressive’s plus points. Its A. M. Best rating is “A+,” the second highest possible.
However, the best insurance for the Tesla Model 3, S, and X also needs to deliver superior customer service, and Progressive insurance is outclassed by its major rivals in this category. It scores three out of five stars in J.D. Power’s 2018 rankings in the claims handling and shopping departments. Furthermore, its rating on the Better Business Bureau’s website is a “B-,” which is below the industry average.
Nonetheless, this is Progressive’s only notable downside. If you’re prepared to be patient with its customer service, the company is a terrific option for your Tesla.
Choose Progressive for affordable rates and for all the bells and whistles that big insurers offer.
Look elsewhere if you want Tesla insurance that comes with the most reliable customer servic
Discounts for Tesla Drivers
The various discounts and benefits you can qualify for as a Tesla owner are an excellent remedy for the high insurance costs and the high base prices of Tesla models. Here are some of the benefits Tesla owners may enjoy:
Federal Tax Credit
This is for those buying new Tesla cars. At the time of writing this guide, it was $1,875. However, this credit should phase out by 2021, according to CNNBusiness.
EV Insurance Discount
Many insurance companies award electric vehicle drivers with a premium reduction. After all, their carbon footprint is three times lower compared to regular cars. That’s why you should buy your Tesla insurance from companies like Liberty Mutual, Farmers, USAA, Auto-Owners, Geico, and Nationwide, to name just a few.
At this point, the safety statistics on self-driving cars aren’t encouraging enough for major insurers to take the risk. Still, some insurance companies reward those using Tesla’s Autopilot. One of them is Root Insurance, which recently announced its program for Tesla drivers. It relies on tracking Autosteer-eligible highway miles, and then it provides a tiered premium reduction. The more you use Autopilot, the more miles you’ll collect, and the lower your Tesla insurance rates will be.
Standard Insurance Discounts
There are many standard insurance discounts that Tesla drivers should take full advantage of. Below is a list of the ones Tesla owners can easily obtain:
If your car has a factory-installed theft prevention device, you’ll get a discount on your comprehensive coverage. All Tesla models, even the most affordable options, are fitted with enough theft-alert systems to warrant this discount. However, you may get even lower Tesla Model X and Tesla Model S insurance rates if you choose the optional Enhanced Antitheft System.
Vehicles equipped with standard safety features, such as factory-installed airbags and ABS, will get you a discount. All current Tesla models have a myriad of safety features, meaning it should be easy to qualify for this discount.
Does Tesla’s New Insurance Policy Provide Lower Premiums?
Currently, InsureMyTesla is the only insurance program that Tesla offers. It’s not more affordable than the regular policies from companies like Progressive, Geico, or Travelers.
As far as Tesla’s new insurance project with State National is concerned, we’ll just have to wait and see. The company promises to deliver a groundbreaking system that’ll rely on Autopilot to calculate premiums. While we don’t doubt Tesla’s capability to create revolutionary products, we are a little bit skeptical about the novelty of this idea.
However, this doesn’t mean you shouldn’t give it a chance when Tesla finally rolls it out. Just remember to compare quotes from different insurers. It might turn out that another company offers better rates and more optional coverages than Tesla’s fancy new insurance.
Tips on How to Save on Tesla Auto Insurance
Choose an Insurer That Offers Several Discounts
Taking the full advantage of discounts is one of the best ways to qualify for affordable car insurance. We already discussed the premium reductions that are easy to obtain for Tesla owners, but there are a few more that you can qualify for without difficulty.
This is awarded to customers who are insuring multiple vehicles or buying different kinds of policies from the same company.
Good Driving Discount
No insurer would miss a chance to cover a driver who’s a proven low risk. That’s why the majority of companies offer a premium reduction for those who’ve been accident-free for five years or more.
Driver Habit Tracking
The new Tesla car insurance plan will tap into the Autopilot feature to adjust your premiums, but before that happens, you could enroll in a similar program that’s already widely available. If you do, your insurer will use either a GPS device or a mobile app to track your driving habits. They’ll monitor how safely you drive, how often you brake suddenly, and how frequently you drive during the night. If your results are good, you may get as much as 50% off your Tesla insurance premium.
Good Student Discount
While Tesla statistics indicate not many people under 30 own one of these electric marvels, those who do can profit substantially from this discount. You just need to be a full-time student with a GPA of 3.0 (B) or higher.
Explore the Market
We give this advice in almost every guide on our site, and for a good reason. Car insurance prices fluctuate a lot, depending on the company. For instance, State Farm charged our reference driver for Tesla Model S insurance a whopping $406 per month, while Wawanesa provided the same coverage for the same driver for just $142 per month. On top of that, Wawanesa is a better insurance company overall.
However, you shouldn’t rely only on the comparisons we’ve made. Insurance quotes are highly specialized, meaning tiny differences in your profile can make a vast difference in the final results. Furthermore, each company has a unique market strategy, which they frequently adjust based on their profits and losses.
For these reasons, comparing Tesla insurance quotes is something you should do your own. We recommend creating a list of at least five insurance companies that seem like the right fit for you. After that, obtain quotes from all of them, and then add a couple more if you don’t like the results. The whole ordeal shouldn’t take more than a couple of hours online.
When you’re comparing insurance companies, you’d like to know more than just prices. For instance, you may be interested in whether an insurer would look for excuses instead of paying a claim, or if they offer the GAP insurance your loan provider requested. Studying our car insurance reviews will help you do that. We compared more than 24 different US insurers and ranked them based on the most relevant metrics.
Frequently Asked Questions
Does Tesla offer insurance for its cars?
Yes, Tesla offers InsureMyTesla coverage through a partnership with Liberty Mutual.
The program doesn’t provide anything that you can’t find elsewhere in the industry.
Furthermore, based on our research, it’s not cheaper than the other car insurance plans that you can get for your Tesla.
Nonetheless, it provides a splendid combination of coverages that can suit your Tesla perfectly.
Are electric cars more expensive to insure?
Electric cars are more complicated to repair, which raises the insurance cost. Thus, they’ll be more expensive to cover, especially if you buy collision and comprehensive coverages.
These two protection plans cover your vehicle if it rolls over, you hit another object, or it’s damaged while parked.
However, unless you’re leasing, these coverages aren’t mandatory.
Why is Tesla insurance so expensive?
The two main reasons are significant repair costs and higher claims frequency. The bodies of the Model S and the Model X are made entirely out of aluminum, while the body of the Model 3 is made out of aluminum alloy, which makes any repairs very complicated.
Furthermore, there’s only a limited number of body shops that are qualified to fix them, and they aren’t cheap.
Finally, research by the Highway Loss Data Institute suggested that Tesla owners file claims more frequently than average. For these reasons, some insurers, like AAA, increased their rates for Teslas.