Tesla Auto Insurance Review (2022)

Tesla Insurance is here and making big moves in the car protection game. With this Tesla auto insurance review, learn the average costs of insuring a Tesla with standard providers and how much drivers will pay with Tesla Insurance. The average cost of Tesla Insurance by model will vary between $1,900 and $3,000 per year. For example, the Tesla Model 3 insurance costs an average of $2,215 per year, which is more than 50 percent higher than the national average of auto insurance. Tesla offers insurance that can save drivers 25 percent (available in California only). Average annual rates may be around $789.40 compared against California averages reported by the NAIC. To find the cheapest Tesla auto insurance, make sure to check smaller local providers as well. They may offer lower policy options than the bigger companies in your state. Start comparing insurance providers here.

UPDATED: Oct 21, 2022Fact Checked

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

Full Bio →

Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

UPDATED: Oct 21, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

UPDATED: Oct 21, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

UPDATED: Oct 21, 2022Fact Checked

The Bottom Line

The Bottom Line

Tesla is a company that inspires enthusiasm and trepidation at the same time.

It produces inventive ideas like auto insurance for Tesla owners but incurs hundreds of millions of dollars’ worth of losses on occasion as its attempts to expand, putting stress on its revenue streams.

The vision for a world that is not reliant on fossil fuels, one that helps out the environment, is admirable. But Elon Musk sets an example that is tough to match and might put stress on Tesla’s workers’ work-life balances.

Its insurance proposes to cut rates by 20–30 percent compared to other insurers but there is uncertainty as to how it will succeed.

Fortunately, it has a stable underwriting partner in State National. It has an A rating from A.M. Best, meaning it has an excellent chance to meet its ongoing insurance obligations.

Will Tesla Insurance succeed? There’s no way to know for sure. However, if it goes like the other parts of Tesla, it will be an interesting ride.

Tesla is known for everything from electric cars to solar panels, and that little bit about over-promising and under-delivering. It is an organization full of programmers and innovators, but even its latest move raised eyebrows.

But, insurance?

Underwritten by State National Insurance Company, Tesla Insurance offers insurance plans for customers who have Teslas. Those insurance plans are supposed to be 20 to 30 percent lower than rates with other companies.

Strap yourself in. Let’s learn about this program in this Tesla auto insurance review.

Ready to compare rates? Try our FREE online tool.

Is Tesla Insurance a Good Choice?

Tesla’s Rating Agency

Ratings are important. It’s why we have the New York Times Best Seller list, People’s Most Beautiful list, and Navigant Research’s autonomous vehicle companies list.

There is no doubt that Tesla has grown tremendously in the past few years in terms of overall revenue. But that doesn’t necessarily mean the company’s financial outlook is strong.

And if you’re looking to buy insurance from them, you will want to know if it’s a financially strong company.

That’s what we’ve got here — a mix of financial ratings and customer satisfaction ratings. So that you, as a current or potential buyer, know what your peers think of it.

We’re on stretch one. Let’s give it some gas.

Better Business Bureau

The Better Business Bureau (BBB) is an organization that ranks businesses through numerous factors.

The rating methodology for businesses includes resolving customer complaints, any legal action filed against the business, and any advertising issues known.

BBB gives Tesla an A+.

Customers are somewhat mixed about Tesla, giving it a 3.1 out of five stars out of 96 reviews. There were 1,200 complaints closed in the past three years, which is more than GM, Ford, or Toyota.

Moody’s Rating

Moody’s is considered one of the big three financial rating agencies in the United States. It issues credit ratings, economic outlook ratings, and overall financial strength ratings.

Moody’s gives Tesla a B3 rating. What does this mean? According to Moody’s methodology, “obligations rated B are considered speculative and are subject to high credit risk.” A 3 is the lowest sub-rating in the B category.

This B3 rating is for Tesla’s long-term global outlook, based on evaluating credit levels and the amount of revenue coming in. The company is considered stable and not on watch.

S&P Rating

Standard and Poor’s (S&P) is also considered a big three financial rating agency in the United States. Like Moody’s, it issues credit ratings, economic outlook ratings, and overall financial strength ratings.

S&P gives Tesla a B- rating. This means, according to S&P’s methodology, that Tesla is at a higher risk of nonpayment than those with a BB or above.

It is still able to meet its financial obligations but may have trouble under adverse economic conditions.

The S&P wrote in May when it upgraded Tesla’s ratings, “The negative outlook reflects risks related to weaker than expected demand, ongoing profitability challenges, and the company’s lack of free cash flow over the next 12-24 months.”

It added that due to these factors and Tesla’s rising financial commitments, the company’s financial position might be unsustainable.

Consumer Reports

Consumer Reports (CR) is an organization that allows consumers to rate their satisfaction with a company. It also rates products, such as mattresses, vacuum cleaners, and cars.

CR has not been positive about Tesla’s vehicles. The highest-rated vehicle is the 2019 Model S (78 out of 100), while the lowest is the 2019 Model X (just a 55).

However, in spite of the low CR ratings for Tesla’s vehicles, Tesla’s customers are satisfied, coming in at the top of all car manufacturers. Its customer satisfaction rating is 89 out of 100.

Consumer Affairs

Consumer Affairs is a bit like CR without product reviews. Instead, it is a site where customers can rate a company and leave reviews.

Overall, consumers had mixed feelings about Tesla, giving it 3.2 out of five stars from 328 reviews. Some of these complaints had to do with customer service or the repair process. The purchase process was lauded by some.

Tesla History

Tesla was founded in 2003, named in honor of Nikola Tesla who, along with Edison, was one of the two most impactful inventors of the late 19th century.

Its goal to supply American households with affordable, quality electric cars was simple in theory but difficult in execution.

Still, it attracted investor after investor, with current CEO Elon Musk supplying money each round. Today, the name is synonymous with electric cars and innovation. Flash and glam and great car release nights.

But we know that you might care more about a company than just its products.

How it treats its employees, what it does in the community, even its position for the future can all play a role in whether you sign up for them or not. How does Tesla measure up in these regards?

We’re heading into stretch two.

Tesla Market Share

There are two components to Tesla’s market share. The first is the geographic area, such as California, the United States, or global. The second is between the electric vehicle (EV) market and the whole automotive market.

When it comes to the first, Tesla’s market shares are fairly small.

In California, Bloomberg reports that Tesla’s market share for all automobiles is 4.2 percent. In the U.S., that number is around 2 percent, according to Statista.

And while it’s tough to gauge its market share worldwide, The Driven reports that Tesla tripled its market share in Europe in the first half of 2019 from .16 percent to .54 percent.

The reason for the rise is the Model 3 electric sedan, which, when released, became a bestseller in 2018. Due in large part to it, California’s EV market share rose above 5 percent for the first time.

This car has also helped Tesla further dominate the U.S. EV market, with 60 percent of all EV purchases in the first quarter of 2019 being a Tesla 3. That contributed to an overall EV market share of 50 percent.

What does this mean for insurance? As we’ll see, Tesla’s insurance only applies to Tesla owners, meaning that the larger its market share, the more potential customers it has.

Tesla’s Position for the Future

Tesla’s future seems both bright and uncertain, a strange mix for a company that currently dominates market share in an upcoming industry segment.

While it generates roughly $5 billion in revenue each quarter, it scales up its production often dramatically, causing it to lurch in an uncomfortable financial position.

Moody’s and Standard and Poor’s both rate Tesla in the middle tier. This means it has a higher chance of not meeting credit obligations (paying back debt) than other, more highly-rated companies.

Standard and Poor’s actually rated its outlook as negative.

But there’s always the flip side. It dominates an upcoming market segment in electric vehicles, has the brand name to get people’s attention, and soon will be producing vehicles that appeal to middle-class workers.

This should all increase its revenue and market share significantly, especially if taxpayers are continuously rewarded for buying electric vehicles and the market shifts in that direction.

And then there is the insurance angle, which is why we’re here today. Tesla’s insurance is just for Tesla owners, meaning that the more it grows in market share, the more customers it might have.

Tesla Insurance Rates

What is the average cost of insuring a Tesla?

Tesla started offering auto insurance on August 28th, revealing the insurance with a blog post on its website. It mentioned several points, including who would be included, in what states, and more.

  • Tesla Insurance would be for Tesla owners only.
  • It would be available solely in California.
  • It would be 20 to 30 percent cheaper than getting insurance through other insurers.

Average Tesla Male vs. Female Car Insurance Rates

California does not allow insurance companies to set rates based on gender. Other states are following suit.

Average Tesla Coverage Level Rates

Auto insurance coverage levels can range for numerous reasons.

The first is the number of coverages you have. If you have liability on top of comprehensive and collision, your coverage level is higher.

The second is the limits on your coverages. For instance, if you have a $50,000 bodily liability limit versus a $30,000 bodily liability limit, your coverage levels will be higher.

It is unknown what coverage limits Tesla will offer, but it will at least be 15/30/5. Those are the minimum liability auto insurance coverages required in California.

  • $15,000 for bodily injury or death per person
  • $30,000 for total bodily injury or death per accident
  • $5,000 for property damage per accident

Savings for Tesla Insurance range from $490–$1,060.

Average Annual Auto Insurance Rates for Tesla Compared to Average Company Rates by Coverage Level
GroupCoverage LevelAnnual Average Auto Insurance RatesTesla Average Annual Auto Insurance RatesTesla Savings Compared to Average Company Rates
AllstateHigh$4,739.46$3,791.57$947.89
AllstateMedium$4,572.72$3,658.18$914.54
AllstateLow $4,287.09$3,429.67$857.42
FarmersHigh$5,307.39$4,245.91$1,061.48
FarmersMedium$5,038.58$4,030.86$1,007.72
FarmersLow$4,651.83$3,721.47$930.37
GEICOHigh$3,127.30$2,501.84$625.46
GEICOMedium$2,918.49$2,334.79$583.70
GEICOLow$2,612.92$2,090.34$522.58
Liberty MutualHigh$3,219.54$2,575.63$643.91
Liberty MutualMedium$3,061.95$2,449.56$612.39
Liberty MutualLow$2,824.01$2,259.21$564.80
NationwideHigh$5,046.66$4,037.33$1,009.33
NationwideMedium$4,734.55$3,787.64$946.91
NationwideLow$4,179.52$3,343.62$835.90
ProgressiveHigh$3,061.73$2,449.38$612.35
ProgressiveMedium$2,936.65$2,349.32$587.33
ProgressiveLow$2,555.04$2,044.03$511.01
State FarmHigh$4,541.30$3,633.04$908.26
State FarmMedium$4,273.41$3,418.73$854.68
State FarmLow$3,793.44$3,034.75$758.69
TravelersHigh$3,687.46$2,949.97$737.49
TravelersMedium$3,440.36$2,752.29$688.07
TravelersLow$2,924.52$2,339.62$584.90
USAAHigh$2,892.32$2,313.85$578.46
USAAMedium$2,746.50$2,197.20$549.30
USAALow$2,445.05$1,956.04$489.01
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This is based on its 20 percent discount.

What is the average cost of Tesla insurance by model?

The Tesla Model 3 averages the least cost at under $2,000 with the Model S averaging over $3,000.

  • Model 3 – $1,913
  • Model X – $2,473
  • Model S – $2,963

Expect to pay between $1,900 and $3,000 annually to insure your Tesla.

 

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Tesla Insurance Discounts Available

Getting the Best Rate with Tesla

Discounts are also a bit of an unknown. However, there are four that Tesla mentions in its FAQ section. Three are demographic- or policy-oriented.

Tesla Personal Auto/Policy Discounts
Personal Auto DiscountsDetails
HomeownerNeed to be a homeowner
Multiple DriversA discount for insuring more than 1 driver
Multiple VehiclesA discount for insuring more than 1 vehicle
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The last is a particular focus of Tesla and a key selling point when it comes to its insurance.

Tesla Vehicle Discounts
Vehicle DiscountsDetails
Advanced Safety FeaturesExamples: Anti-lock brakes, electronic stability control
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One discount Tesla has made clear it won’t have, at least initially, is telematics. This is fairly common with other insurance carriers and involves installing an app that monitors driving.

Tesla doesn’t have this now but indicates it might in the future.

Tesla’s Programs

For its own insurance, there doesn’t appear to be a special program. However, at one point it had a program through a partnership with Liberty Mutual.

It was called InsureMyTelsa and was supposed to lower rates for Tesla drivers, who had high rates even compared to other luxury car owners.

As of now, there’s no evidence of that program on Tesla’s website. It appears that it might have been shelved, as customers still complained of high rates and Tesla decided to roll out its own insurance program.

Tesla Insurance Coverage Options

Tesla: Types of Coverages Offered

It is unknown which coverages Tesla will offer, as it has none listed on its website. However, there are some typical coverages that companies offer.

Six are personal auto coverages.

Types of Personal Auto Coverages
Personal Auto CoveragePurposeExample
Bodily Injury LiabilityWill pay for the other drivers' medical bills/loss of income in an accident you causedWhen the 25-year-old rock star you hit has broken his strumming hand
Property Damage LiabilityWill pay for the damage to the property in an accident you causedWhen the policeman insists you pay for hitting his vehicle
Personal Injury ProtectionPays for your medical bills/loss of income after an accidentWhen someone T-bones you and you get a strained neck
Uninsured MotoristHelps you when you are in an accident with a driver who's uninsuredBecause drivers in American have no chill
Underinsured MotoristHelps you when you are in an accident with a driver who's underinsuredBecause some drivers in America have more chill than others
Medical PaymentsHelps pay for you and your passengers' medical costs after an accidentWhen the hospital comes a-callin'
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Two are vehicle coverages.

Types of Vehicle Coverages
Vehicle CoveragesPurposeYou might need it:
CollisionPays for damages to your car in a collision with an object or vehicleWhen an 80-year-old woman strikes your car from the rear
ComprehensivePays for damages to your car for situations not involved in a collision (theft, vandalism, etc.)When a 16-year-old kid spray-paints your car
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And this special auto coverage is specifically mentioned on the website in the FAQ section of Tesla’s website.

Types of Special Auto Insurance Coverages
Special Auto CoveragesPurposeYou might need it:
Emergency Roadside AssistanceWill pay for when you need a tow, jump start, or moreWhen it's pouring rain and you're stranded on the side of the road
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The guess is that Tesla will roll out a complete auto insurance plan, with enough coverages to compete with other companies in California.

Frequently Asked Questions

Frequently Asked Questions: Tesla Auto Insurance

Every company has frequently asked questions. Here are five about Tesla Insurance.

#1 – Is Tesla Insurance expensive?

Tesla Insurance is supposed to be 20–30 percent cheaper than insurance from other carriers. A brief look at a Reddit thread about the rates indicates many users’ rates were decreased. However, the algorithm is still being adjusted.

#2 – When will Tesla Insurance be available?

Tesla Insurance launched in late August. It is available now but only in California and only for Tesla owners. There are plans to expand the insurance availability nationwide, but there’s no definitive date on that expansion at this writing.

#3 – Who underwrites Tesla Insurance?

State National Insurance Company underwrites Tesla Insurance. It is a subsidiary of the Markel Corporation, which underwrites companies in many industries, including property and casualty insurance. State National has an A rating from A.M. Best.

#4 – How does Tesla Insurance work?

Tesla purports that its insurance is 20–30 percent cheaper than other insurers’. It does this by taking advantage of Tesla cars’ advanced safety features, pairing owners with Tesla Body Repair Centers, and cutting out agents by selling insurance directly.

#5 – How do I buy Tesla auto insurance?

Tesla doesn’t have any in-person agents or insurance shops you can drop into, so you have to purchase insurance directly through the company. You can do so through its website or by calling 1-844-34-TESLA (1-844-348-3772).

#6 – Are EVs really more expensive to repair?

Yes. Part of why is that it requires certain expertise to repair an electric vehicle.

As for Teslas, the materials to manufacture them are different from standard materials and more expensive — which contributes to the price.

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

Full Bio →

Written by Rachel Bodine
Feature Writer Rachel Bodine

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

Full Bio →

Reviewed by Daniel Walker
Licensed Auto Insurance Agent Daniel Walker

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