Is Tesla Insurance Cheaper? (All You Need to Know)

Tesla´s are one of the most popular electric vehicles on their market, but, like every other car, they require insurance which can get pricey.

Lucky for Tesla owners, Tesla has its own insurance that may be cheaper to purchase than the leading competitor.

Tesla insurance is far cheaper than most insurance companies when it comes to coverage for a Tesla. The car company offers affordable premiums for the owners of Tesla vehicles to make their ownership experience more enjoyable.

In this article, you will learn everything you need to know about Tesla insurance and how it works in favor of Tesla owners.

Table of Contents

How Much Cheaper is Tesla Insurance Than Its Competitors?

Tesla not only offers insurance for its vehicles, but it also tends to blow the competition out of the water, especially for the newer models.

Comparing premiums for new Tesla models, Tesla insurance is as much as 40% to 50% cheaper than some of the leading insurance companies such as Geico, Farmers, and State Farm.

For most new models, Tesla insurance averages about $2,000 per year. For older models, the cost is even less. However, when it comes to the older models, some of the competitors can offer cheaper insurance than Tesla.

Only six insurance companies have shown to outcompete Tesla insurance on older Tesla models and the difference ranges from $100 to $1300 annually.

Only USAA and State Farm successfully offer cheaper insurance for older Tesla models, but they cannot hold a torch to premiums for new Tesla models.

Can I Get Tesla Insurance in Any State?

Unfortunately, Tesla insurance is not available in every state. The only states that you can purchase Tesla insurance in are Arizona, Oregon, Colorado, Utah, Maryland, Virginia, Nevada, Texas, Illinois, Ohio, and California.

For those who live in California, Tesla insurance operates differently than in the other states and may not include the same features available to other state Tesla owners.

Although Tesla insurance is only currently available in eleven states, the company has stated that its intention is to expand to cover at least forty-five states by the end of the year 2022.

At this time, it is unknown which states will still be left without available coverage; however, it can be speculated that the remaining states will have coverage made available shortly.

Even though the current list is short, there are a projected thirty-four states to add coverage within the next few months so Tesla insurance availability will increase dramatically in the foreseeable future.

How Does Tesla Insurance Calculate My Rate?

Tesla insurance bases its rates off of a safety score that is calculated by a telematic driving system similar to what some other insurance companies use. However, unlike other insurance companies that may not divulge what driving factors influence how much you pay for your premium, Tesla reveals five different variables used to calculate your insurance rate.

Your safety score is calculated based on the percent of the time you engage in hard braking, unsafe following, and aggressive turning.

It also factors in the number of times you disengage the autopilot forcefully and how many forward collision warnings you have per one thousand miles.

Most Tesla insurance carriers will receive a premium based on a safety score of 80. However, if you can achieve a higher score, your rate will decrease.

For example, if you can score a 100, your insurance premium is 25% less than average so you are paying less than $1,000 per year for your Tesla insurance.

What Factors Do Not Influence My Tesla Insurance Rate?

Insurance providers can use all kinds of factors to calculate your insurance rates based on who you are, your driving history, and your probability of making a claim. However, as we’ve shown, Tesla insurance is not like most insurance companies.

There are several variables that they do not take into account when calculating your insurance premium.

These include your accident history, gender, previous claims you’ve made, marital status, credit score, age, and any past tickets like speeding tickets you’ve acquired.

You are basically starting with a clean slate when it comes to Tesla insurance. They know how much the vehicle you drive is worth and they will give you the opportunity to prove yourself a safe driver to knock down your premium costs.

Tesla’s innovative way of calculating insurance is making it one of the most popular choices among Tesla owners, which is driving its expansion across the country.

What Makes Tesla´s So Expensive to Insure?

Despite the options for cheaper coverage through safe driving with Tesla insurance, Tesla vehicles are still very expensive to insure. It is unlikely that you will spend less than $1,000 per year on insurance for your Tesla.

The reason why insurance for Tesla´s is so high is due to the initial cost of the vehicle as well as any repairs it might require.

Compared to fuel based cars, electric cars are much more expensive to repair if they breakdown or become damaged in an accident because they have much more electronic and computer parts that require precise technology to fix.

In addition to this, Tesla´s have a longer battery life than other electric vehicles meaning they can spend more time on the road and are at higher risk of being involved in an accident.

Some Tesla´s have an aluminum frame which is more expensive to fix, and Tesla´s can only be taken to Tesla approved repair shops.

Can I Get Tesla Insurance If I Don’t Have a Tesla?

At this time, you cannot get Tesla insurance if you do not own a Tesla vehicle. Tesla insurance specializes in the particular needs of its electric vehicles and wants to ensure that it delivers quality coverage focused on Tesla owners.

Therefore, the Tesla insurance providers devote all of their knowledge and service to helping those with Tesla´s afford insurance that will cover the specialized needs of these electric vehicles.

However, if you own a Tesla and have Tesla insurance for it, there is an option to add coverage for additional vehicles in your household that are not Tesla´s.

While Tesla insurance aims to focus its service on Tesla´s in particular, they also realize that splitting insurance providers within a household can be cumbersome.

To accommodate the needs of its customers, Tesla insurance will cover non-Tesla vehicles in addition to your Tesla.

However, your Tesla must be the primary vehicle on the policy or else coverage of any other vehicles is invalid.

Are All Tesla Models Covered by Tesla Insurance?

Tesla insurance will cover Tesla models S, 3, X, and Y. The older models usually have less expensive coverage, while the newer models are a bit pricier.

Every model has premiums calculated based on the safety score with Model 3’s averaging $1800 for annual coverage all the way up to $2900 for Model S coverage.

Tesla insurance even covers models with some of the more expensive upgrades, although these do come at a higher premium.

While all insurance companies may be hesitant to cover vehicles with keycard access, bioweapon defense mode, lane departure avoidance, automatic emergency braking, and sentry mode, Tesla insurance covers it without flinching.

Because these systems can be expensive to repair though, if your Tesla is equipped with any of these features, your premium will most likely be much higher than if your vehicle was simply the standard or older model.

Tesla Insurance FAQs

Is It More Expensive to Insure a Tesla Than a Non-Electric Vehicle?

Since Tesla’s have more computer parts and electronics than non-electric vehicles, repairs are typically much more expensive. Because of the potential for a higher cost of repairs, Tesla´s are much more expensive to insure than most non-electric vehicles.

However, with Tesla insurance, their safety score calculations attempt to defer some of these high costs.

Additionally, even fuel-run vehicles have a lot of computer systems in them nowadays so insurance tends to be more expensive for new cars than for older models.

If you’re comparing a same year Tesla to a non-electric vehicle, the insurance for a Tesla is most likely more expensive.

However, if you compare an older Tesla to a brand new fuel-driven vehicle, there is a chance that insurance for Tesla could be cheaper, especially if it is provided through Tesla insurance.

What Other Insurance Companies Insure Tesla´s?

Although Tesla´s have a lot of parts that can be expensive to replace and require specialty shops for repairs, there are a lot of insurance companies that will cover Tesla´s.

A lot of the top competing car insurance companies such as USAA, State Farm, Farmers, Progressive, Geico, All State, and AAA will cover Tesla´s.

These large companies have the overhead and the financial ability to cover high repair costs and expensive claims that can come with a Tesla. However, some smaller companies also cover Tesla´s as well.

Of course, Tesla has its own insurance available and understands perhaps better than any of its competitors the risks and costs that go into the coverage of an electric car.

Not all insurance companies have the ability to cover Tesla´s, however.

So, if you are a new Tesla owner or you are looking to switch coverage, shop around and before you get your heart set on a premium, ask if they even cover electric cars including all of the accessories that come with the vehicle.

Who Has the Cheapest Tesla Insurance?

Depending on where you live and what model Tesla you drive, different insurance companies may come out on top for the cheapest Tesla insurance.

Some of the lowest premium prices found for Tesla´s are those offered by Progressive, USAA, Amica, Erie, and Tesla itself.

Different states have different companies available, but overall, the top insurance provider found nationwide that consistently offers some of the lowest prices for insurance on Tesla´s is USAA.

Tesla insurance can beat out most of its competitors too in the states where it is available.

Additionally, with the highest possible scores on the safety score calculations, Tesla insurance can even offer lower premiums than USAA.

There are other ways to get lower insurance rates as well. Other insurance companies offer incentives for safe driving, good grades, and participation in defensive driving courses.

Why Is Tesla Insurance So Cheap?

It may be surprising that Tesla insurance is cheaper than some of the leading insurance names, especially those that offer typically excellent rates.

The biggest reason why Tesla insurance is so cheap by comparison is that Tesla has intimate knowledge of the cars and technology used to build them.

The company builds the cars it insures so it knows exactly how much they are worth, they can vouch for their structural integrity and performance, and they can recommend and provide top notch repair services. There is no guesswork when it comes to insuring a Tesla.

Other insurance companies may have a blanket price for the cost of electric vehicle repairs that can grossly overestimate the reality of the price.

They cannot afford to get bogged down with details when they have to factor in coverage for a multitude of other vehicles as well.

Tesla insurance has the privilege of focusing its energy on one brand, thereby cutting unnecessary guesswork costs for the customer.

As Tesla insurance becomes more widely available across the country, overall premiums could decrease since they will be adding more paying customers to their list of clients.

Conclusion

Tesla insurance is not only an innovative idea for the electric car that has taken over the country, but it is a sensible one for a Tesla driver’s wallet.

In the states that Tesla insurance is available, it is one of the cheapest options for car insurance, beating out other insurance companies by up to 50% in some cases.

Tesla insurance uses the unique calculations of its safety score to determine annual premium costs and doesn’t focus on factors such as driving and claims history or demographic information like gender or age.

Tesla´s are the way of the future – both the cars and the insurance.

References

https://www.tesla.com/support/insurance