Tesla car insurance

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Want to put a Tesla in your garage? You are not alone.

Insuring a 2021 Model 3 Tesla costs on average $2,257 a year, which is slightly higher than the average cost to insure any other type of vehicle. Insurance costs tend to be higher on all electric vehicles due to higher repair costs as well as all the high technology stuffed into every Tesla model.

 Keep reading to learn everything you need to know about insuring a Tesla.

Cruising around town is a Tesla certainly has its advantages, the savings on gas is a major factor as well as the benefits to the climate, not to mention all of the high technology packed into their vehicles. However, you can expect to pay a bit more for insurance coverage when you hit the streets in a Tesla.

How much does it cost to insure a Tesla?

It will vary by model, but in general, a Tesla tends to be a bit more expensive than most standard vehicles. As an example, the average premium for a 2021 Tesla Model 3 runs $2,257 a year which is $420 more than the average nationwide car insurance rate across all vehicle types which comes in at $1,839 a year.

The Tesla Model 3 is, on average, more expensive to insure than all vehicle types, except convertibles which are costly to insure because they often have a high starting price and are easy to steal due to their less than solid roofs.

Below are the average rates for all vehicle types compared to a Tesla:

• Van: $1,443
• Trucks: $1,684
• SUVS: $1,729
• Tesla Model : $2,257
• Cars: $2,193
• Convertibles: $2,442

The cost of Tesla car insurance will also vary depending on the model you choose with the Model Y often being the cheapest to insure while their sporty Model X or Model S are much more expensive to insure with an average insurance cost of over $4,000 a year.

In addition to the model, the trim level you choose for your all-electric ride will impact your insurance costs as well. A Tesla Model S trim will be less expensive to insure than the Model S Plaid for a couple of reasons. A higher starting price, the Plaid costs roughly $35,000 more than the base Model S as well as a more robust engine, all of which leads to higher insurance costs.

Why are Tesla’s expensive to insure?

Teslas tend to be more expensive to insure than many other vehicles out on the road. There are a number of reasons for this:

Cost

Insurers always consider the cost of the vehicle when setting a premium as they may have to cover the cost of replacing the car if you are involved in an accident that totals the car. As an example, the Model S Plaid starts at $129,000 while the Model 3 only costs $38,000 so insurance companies will charge more for the Model S as they may eventually be on the hook for the cost to replace it. 

Repair costs

Tesla’s are packed with expensive technology that includes not only a large battery that costs a ton to replace as well as cameras and sensors that often require specially trained technicians to repair. All this tech pushes up the cost of repairs dramatically. Insurers consider repair costs when setting a premium as they may end up covering a huge repair bill if your Tesla is damaged by a covered peril.

Repair locations

In many cases, Tesla’s must be repaired at Tesla approved repair shops where the staff has been trained in repairing Tesla vehicles. Due to the limited number of these repair shops, repair costs tend to be higher.

Unibody construction

Tesla has incorporated unibody construction with many models which means that in the event of an accident, large aluminum panels must be replaced which runs up both the cost of labor and parts, which leads to higher premiums.

How much is insurance on a Tesla by state?

In addition to the cost of the vehicle and repair costs, insurers consider a variety of your personal factors. Everything from your driving record, credit score, age, marital status and claim history will all be considered.

One other factor insurers consider is the location of the vehicle. The cost to insure a car can vary by state, city and even neighborhood. In addition, your insurance premium will be lower if you keep the car in a garage and off the street at night.

Insure.com ran the numbers to see which states are the least and most expensive when it comes to insuring a Tesla. The numbers reflect the shocking differences in premiums by both state and Tesla model. While you can insure a Model Y for a mere $1,195 in New Hampshire, covering a Model S in Michigan will set you back a cool $8,032 a year.

How much does it cost to insure a Tesla in your state? You can use our Tesla insurance cost by state calculator to find out the car insurance rate in your state for your specific Tesla model.

Tesla Insurance Cost by State

Model

Model S Model 3 Model X Model Y

State

AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutDelawareDistrict of ColumbiaFloridaGeorgiaHawaiiIdahoIllinoisIndianaIowaKansasKentuckyLouisianaMaineMarylandMassachusettsMichiganMinnesotaMississippiMissouriMontanaNebraskaNevadaNew HampshireNew JerseyNew MexicoNew YorkNorth CarolinaNorth DakotaOhioOklahomaOregonPennsylvaniaRhode IslandSouth CarolinaSouth DakotaTennesseeTexasUtahVermontVirginiaWashingtonWest VirginiaWisconsinWyoming

Average Rate

$3,353

Compared to National Average Difference

-$555

Also,check out the results below, followed by a chart showing average rates in every state:

Model 3

• Cheapest state: Idaho at $1,505 a year
• Most expensive state: Michigan at $4,160

 Model S

• Cheapest state: New Hampshire at $2,526 a year
• Most expensive state: Michigan at $8,032

Model X

• Cheapest state: Maine at $2,207 a year
• Most expensive state: Washington D.C. at $7,497

Model Y

• Cheapest state: New Hampshire at $1,195 a year
• Most expensive state: Missouri at $4,721

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Cheapest car insurance for Tesla models

In most cases, Tesla insurance will be a bit more expensive than insurance for a standard vehicle. Car insurance quotes can vary dramatically between car insurance companies due to a variety of factors.

The best way to find an affordable policy that provides robust coverage is to shop a variety of insurance companies, always make sure you are comparing apples to apples when it comes to coverage levels and deductibles. Insure.com ran the numbers on a variety of different Tesla models to find the average premium for Teslas by insurer.

Below are the cheapest and most expensive insurers for each model followed by a chart that shows the average premium for a variety of insurance companies:

Model 3

• Cheapest insurance: State Farm at $1,421
• Most expensive insurance:  Allstate at $4,254

Model S

• Cheapest insurance: State Farm at $2,171
• Most expensive insurance:  Allstate at $8,716

Model X

• Cheapest insurance: State Farm at $1,644
• Most expensive insurance:  Allstate at $5,779

Model Y

• Cheapest insurance: State Farm at $1,452
• Most expensive insurance:  Allstate at $3,869

These numbers clearly illustrate the benefits of shopping your coverage, as you can see there are dramatic differences in premium quotes.

Check out our Tesla insurance cost by company calculator. This easy-to-use calculator will allow you to compare the cost of insurance from different companies. Just enter your information and you will get the rates from top car insurance providers.

Tesla Insurance Cost by Company

Model

Model S Model 3 Model X Model Y

Variant

Performance 75D

Company	Avgerage Rates
Allstate	$8,716
Farmers	$6,925
GEICO	$3,106
Nationwide	$2,478
Progressive	$2,291
State Farm	$2,171

How does Tesla insurance work?

Tesla insurance is no different than insuring any other vehicle. There are a number of different coverages you should consider, and if you are financing the vehicle, certain coverages will be required.

You should always consider the following coverages when insuring a Tesla or any other vehicle:

• Liability: Bodily injury and property damage liability coverage is required in almost every state in the country. It will cover medical and legal bills for anyone that you injure with your vehicle. It also covers damage you do to other people’s property with your vehicle.
• Collision: This coverage will pay to repair your vehicle if it is damaged in a collision. If you financed your vehicle, your lender will require that you carry this coverage.
• Comprehensive: This will cover the cost to repair your vehicle if it is damaged by something other than a collision. Comprehensive covers damage from flooding, fires, severe weather and even animal strikes.
• Uninsured/Underinsured motorist: If you are hit by an uninsured or underinsured motorist, this coverage will step up to repair or replace your vehicle.

Tesla offers their own insurance

In August of 2019, Tesla started offering insurance coverage to its customers in California and Texas with the intention of expanding the program to other states. The goal is to make insurance coverage more affordable for Tesla owners as well as provide coverage that is specific to Tesla vehicles.

The program is underwritten by State National Insurance in California, and Redpoint Insurance in Texas. According to Tesla, the program should lower insurance costs for certain Tesla models, be up 20 to 30% lower than other insurance companies.

In addition to lower prices on insurance, Tesla’s insurance program offers a variety of coverages that are specific to its vehicles. Here are a few of the additional coverages they offer:

• Autonomous vehicle owner coverage: This coverage is only available via Tesla, other insurance companies do not offer this type of coverage. It provides liability coverage for both bodily injury and property damage if you get in an accident while the vehicle is in autonomous driving mode.
• Wall charger coverage: This coverage protects you from damage if you have an issue with a power charger for the vehicle. It offers up to $3,000 in coverage.
• Electronic key replacement: This offers up to $500 in coverage if you lose your Tesla electronic key.
• Auto loan/lease gap insurance: This coverage is often available from other insurers as well and will cover the difference between the value of your vehicle versus what you owe on it after an accident. In many cases, a vehicle is worth less than what is owed on it if it is totaled in the first couple of years of ownership.
• Cyber identity fraud coverage: Teslas are loaded with technology that may expose your information to hackers. The coverage offers $15,000 in digital identity fraud losses per occurrence and up to $30,000 per period if your information is compromised.

When shopping for Tesla insurance coverage, it is always a good idea to check both Tesla’s insurance program as well as other insurers. While Tesla coverage can be excellent, it does have some downsides. It is currently only available in California and Texas, it is not available if you use your vehicle for rideshare work (Uber or Lyft) and Tesla accesses the vehicles informed autopilot functionality to gather data about your driving habits to set your premium which can have a negative impact if you are not being super careful out on the road.

How to buy Tesla insurance

Purchasing Tesla car insurance is no different than purchasing insurance for any vehicle, even if you are buying it directly from Tesla. Following is a quick overview of purchasing car insurance followed by a brief overview of insurance offered from Tesla.

Get information together

The first step is gathering information about all of the drivers that will be on the policy as well as vehicle details. You will need the VIN number as well as mileage, year, make and model details for the vehicle and name, address, birth date, and driver’s license information for all drivers.

Decide on coverages

Before you start shopping, decide on what coverages you will need for your vehicle. When gathering quotes be sure you are comparing comparable coverage levels and deductibles. While liability coverage is required in most states, you will need to decide if you want to carry collision, comprehensive, uninsured/underinsured motorist and any other coverages your insurer offers. If you have a loan on the vehicle, your lender will require that you carry full coverage.

Shop for car insurance

These days you can buy insurance directly from an insurance company, use a captive or independent agent or even purchase coverage from online-only insurance companies. Regardless of how you end up shopping for insurance be sure to compare apples to apples when it comes to coverage levels and deductibles. Gather at least 3-5 quotes from different insurers before making a decision. Always read reviews and check the financial strength of any insurance company you are considering.

Buy a new policy

Once you have found a new policy that meets both your insurance needs and your budget, it’s time to put a new policy in place. If you are purchasing a new vehicle you will need to provide proof of insurance before you will be allowed to drive off the lot. If you have a policy in place currently, be sure to cancel it after the new policy is in force.

Buying Tesla Insurance

Getting a quote from Tesla is easy, you simply have to log in to your Tesla account. Unfortunately, unless you live in California or Texas, coverage from Tesla is not an option. Tesla has started the process of getting approval to write insurance in both Illinois and Washington state but is currently not selling policies in these states. Their goal is to eventually write policies in all 50 states.

Purchasing a policy from Tesla is quick and easy. Below are directions from their website:

• Simply sign in to your Tesla Account. Input details including your driver’s license information, address and date of birth, with options to add additional drivers or vehicles to your policy.
• After your purchase, you will receive a confirmation email and your Tesla Insurance card will be available to download in your Tesla Account.

Mark Vallet

Contributing Researcher

 

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Mark is a freelance journalist and analyst with over 15 years of experience covering the insurance industry.