Tesla Insurance states it can provide 20% less expensive premiums to insure your all-electric vehicle.
Ultimately, Tesla upped the ante on what electric vehicles can achieve. Therefore, it isn’t surprising how popular they’ve become among customers. If you’re considering buying a Tesla, one factor you’ll want to think of is insuring it.
Our Two Cents — Tesla not only manufacturers a sleek line of all-electric vehicles, but also insures them — but only if you’re Elon Musk’s neighbor.
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Tesla Insurance overview
Tesla owners in California have an advantage in that they can insure their vehicles directly with Tesla. Doing so earns them a savings of at least 20% compared to other providers. Tesla also states it plans to offer insurance coverage to owners in other states in the future. In the meantime, there are other top car insurance providers you can consider if you don’t live in California.
Currently, some of the biggest insurance providers offer coverage for Tesla vehicles. Companies like Geico, State Farm, and Progressive offer insurance coverages for your vehicle. Liberty Mutual announced in 2017 a partnership with Tesla called InsureMyTesla.
Similar to other car insurance policies, how much you pay depends on a variety of factors. These include the age, model and value of your Tesla, where you live, your driving history, gender and age. California is one of the few states that prohibits credit scores from impacting car insurance.
[Read: Best Car Insurance California]
Generally, Tesla vehicles are more expensive to insure because they’re a higher value than other vehicles. To demonstrate, the Model S starts at $69,490, which is comparable to luxury, high-end vehicles. Additionally, Tesla can be more expensive to repair, as they’re constructed with parts custom to Tesla and it isn’t as easy to find body shops to make repairs. Because of this, it’s important to compare providers to determine the best price at the best coverages for you.
Tesla Insurance rates
One of the benefits of Tesla Insurance is it’s less than what other providers charge. The reason for this is Tesla can use aggregate data pulled from its vehicles to determine driving behaviors, frequency and time of the drives. Additionally, Tesla doesn’t charge commissions like other insurance companies.
How much is it to insure a Tesla? Well, the cost of insuring a Tesla depends on the model you select. CNBC reports a Model 3 will run you on average $1,913 annually to insure with a non-Tesla insurance provider whereas insuring a Model S can cost you upwards of $2,963. And this assumes you don’t have any moving violations or accidents, which could also increase the costs.
If you’re a California resident, you can receive a quote by logging into your Tesla account. With Tesla stating you’ll save at least 20%, this translates to a rough estimate of paying $1,530 to insure a Model 3 and $2,370.40 a Model S.
The Simple Dollar’s Tesla Insurance review
To better understand the coverage options you’ll receive with Tesla Insurance, let’s break it down based on its components:
Coverage options: Tesla offers the same full coverage you’ll find with other providers. This includes comprehension, collision, liability and medical coverages. It also provides protection if your Tesla incurred damage resulting from a weather event or to replace it due to a theft.
Provider discounts: Because Tesla can access aggregate data from its vehicles, it can help the safe drivers save as much as 30% off their premium. It also doesn’t charge commissions on insurance, reducing the premium costs further. And, if you have more than one Tesla in your household, you can save with a multi-vehicle discount.
Unique coverages: Tesla offers the Autonomous Vehicle Protection Package. This optional package consists of electronic key replacement, wall charger coverage and cyber identity fraud expenses.
Tesla car insurance competition
The biggest disadvantage affecting Tesla Insurance is its limited availability. Unless you’re in California, you have no choice but to choose another provider, at least for the time being.
On that front, providers like State Farm, Progressive and Geico have been around for a long time. Each is well-known for its customer service, coverage and face-to-face contact with a licensed agent.
Since Tesla Insurance is the new kid on the block, there isn’t much known with it yet. It doesn’t have a J.D. Power customer satisfaction rating, which isn’t surprising because it’s newer. However, Tesla’s estimated savings cannot be overstated. Its vehicles are expensive to insure so having access to 20% savings could be the difference of hundreds of dollars. For the lucky few who have access to this insurance, it’s well worth it to explore more.
What others are saying
The goal behind offering insurance was for Tesla owners to receive a better deal. That said, according to a CNBC report, some owners who have had quotes for Tesla car insurance remark receiving quotes that are much higher than what other providers charge.
Responding to the CNBC report, Tesla noted there were bugs in the algorithm determining price and it has since fixed it. Though, one has to wonder why those kinks weren’t worked out before offering the service.
Another unknown moving forward is how well Tesla will adapt to the insurance market. When Warren Buffett discovered Tesla was selling insurance, he remarked to shareholders that Tesla would struggle, as insurance is a difficult business.
Therefore, time will tell whether Tesla Insurance is able to offer affordable options and expand its coverages to other states.
Tesla Insurance FAQs
Which is the cheapest provider to insure my Tesla?
If you live in California, receive a quote from Tesla as it states it offers significant discounts. Meanwhile, you can also compare quotes with other providers like Liberty Mutual, Progressive and Geico that way you can find the best rate for you.
Is Tesla Insurance similar to other providers?
Yes, Tesla does offer comprehensive, collision, liability and medical coverage. In addition to these, you can also receive optional coverages for car charger damage, key replacement and cyber identity fraud.
What are some things to consider when insuring my Tesla?
Along with the price, service availability is an important factor to consider. Ask your insurance provider if it has nearby shops that specialize in fixing Teslas if you need to file a claim. Furthermore, sometimes parts to repair a Tesla after an accident may need to be shipped to your area before the service can continue, which will delay repairs.
Too long, didn’t read?
Tesla revolutionized the automobile industry and now it’s trying its hand at car insurance with Tesla Insurance. When insuring your Tesla, be sure to comparison shop to get the best deal, as Teslas can be amazing vehicles, but can be expensive vehicles to insure.
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