You might assume that Tesla cars would be easy to insure because they are among the most secure vehicles on the roads today. Many Tesla owners believe the opposite. They can pay thousands more to insure their electric vehicles (EVs) than they would for gas-vehicle drivers.
Laura Adams, an insurance expert, says it can be shocking to find that buying an eco-friendly electric car could cause your auto insurance rates to rise compared to a gasoline-powered vehicle. Car insurance rates are determined in part by the costs of repairing or replacing your vehicle. Hybrids and electric vehicles are more expensive.
There is now a company that writes policies for Tesla cars. It can help customers save between 20 and 30% on their coverage. Tesla is the name of the company. Tesla Insurance Services was created by Elon Musk to offer Tesla owners more value. They write policies specifically for Teslas. Musk and his team are the best people to insure their cars.
What is Tesla Insurance?
According to an article in Insurance Business, Musk launched Tesla Insurance in August 2019 in response to complaints from owners about high insurance premiums. To offer policies specifically for Tesla drivers, Musk previously partnered with Liberty Mutual Insurance. This program he called InsureMyTesla. The premium rates were to be adjusted for the excellent safety features built into the cars.
Musk was not satisfied with the initial attempt, so he took control of the company and created what he called a ” more compelling” insurance product. He kept the program internal, but he established a relationship with State National Insurance Company (a subsidiary of Markel Corporation).
Tesla Insurance is currently only available in California. However, Tesla said that it plans to expand its reach into other markets in 2021. Tesla Insurance will provide coverage in Texas and Illinois. The company has partnered with Midvale Indemnity Company and Redpoint County Mutual Insurance Company to offer this coverage. Tesla’s website states that it’s possible to buy a policy in as little as one minute for qualified owners of its cars. This includes the Model S and Model 3 as well as the Cybertruck, and the first Tesla car, the Roadster.
Although Tesla Insurance is a product of an iconic car company, it has many similarities to traditional insurance. It is usually purchased online, and features standard liability coverage, comprehensive and collision, MedPay and uninsured/underinsured motorist coverage.
What is Tesla Insurance?
Tesla car insurance is new to the market in 2019. It is therefore difficult to get a “big picture” idea of the cost of the insurance. Musk claims that Tesla Insurance is 20%-30% less expensive than similar insurance from other carriers.
To receive a quote for Tesla insurance, one must be a Tesla owner. However, our research shows that the standard coverage for a Model 3 is approximately $3,000 for a 30-year old driver with a clean driving record. This is significantly less than the $4,500 average.
Remember that premium prices can be affected by many factors, including your marital status, age, driving record, and any past infractions.
It might seem that Teslas will have lower costs if they are as safe and reliable as they claim. Safety cars are more likely to cause less accidents which in turn means fewer claims. Tesla Insurance is expensive because the cars are more costly to repair when they have an accident.
For example, the body of a Tesla is made from aluminum rather than steel. Most repair shops don’t have the equipment to handle aluminum panels. The Teslas include a lot of expensive technology, which can be both hard to fix and costly. According to Tesla’s Texas filings, the company plans to offer parts at a reduced rate to certified repair shops — initially set at 15%. Customers will have access to the best mechanics to help them fix their EV.
Tesla Insurance has another silver lining: it recently announced that it will offer a discount of up to 70% on premiums for insurance that is based on the vehicle’s driving data. Tesla will calculate how significant the savings each customer will receive by using key performance indicators, such as how many times the lane departure warning has been triggered and the average following distance used by a driver. This program is similar in concept to Progressive’s Snapshot program, which provides personalized insurance rates based upon how policyholders drive.
Drivers have the option to opt out from this data-sharing discount, but they will be automatically placed in the worst category of eligible savings.
How does Tesla Insurance compare with other auto insurance companies
Tesla Insurance Services provides standard coverage options to car owners. You will also find the types of coverage you’ll find with any auto insurance company. These include:
- Bodily Injury Liability: This coverage covers injuries that you cause to the other vehicle’s driver or passengers during an accident.
- Property damage liability: If you cause damage to another vehicle or its contents, you will be covered by property damage liability.
- Personal injury protection or medical payments: These pay for injuries sustained by you or your passengers.
- Collision – This will cover any damage to your car that is caused by an accident covered by the policy.
- Comprehensive: Comprehensive coverage covers damage from non-accidental factors such as theft, weather damage, or animal contact.
- Uninsured/underinsured motorist: If you are hit by a driver with no insurance or not enough insurance to cover costs, this coverage kicks in.
Tesla offers special liability coverage when your Tesla is in autonomous mode. They also include cyber identity theft coverage. You can also get coverage for electronic keys and wall chargers. These coverages are exclusive to Tesla and are not available with any other insurers.
Tesla offers optional coverages that mirror those offered by other companies. These include roadside assistance coverage, waivers on deductibles if your vehicle is totaled, as well as gap coverage which covers your loan in the event your car is stolen, totaled, or stolen.
Although Tesla isn’t known for offering discounts, there are many other options. These include the autopilot discount which can be used to lower your premiums. You can have more than one vehicle insured through the company. There are also loyalty discounts, good driver discounts, and driver education courses discount. Customers who share their driving habits with the company may be eligible for the 70% discount.
Although Tesla is not the most affordable option to insure your Tesla, they do come in at the lower end of the spectrum, at around $1,000 per year less than larger carriers.
Laura Adams, an insurance expert, advises to get quotes from multiple companies before you make a decision. She advises that you shop around and compare rates from different insurers if you’re looking for Tesla insurance.
Is Tesla Insurance worth the investment?
It is worth getting a quote if you own a Tesla. You don’t have to stop there. Check out quotes from other companies as well so you have several options. Tesla Insurance is not the most affordable option for all drivers. However, because it is specifically tailored for Tesla vehicles, you will be more likely to receive service from professionals who are familiar with these vehicles’ needs.
Even though Tesla’s network includes repair professionals, insurance through Tesla may be worth the extra cost, even though it is slightly more expensive than other national carriers. Tesla Insurance is more affordable if drivers share their data with the company. This is because Tesla’s 10-bucket driver classes are considered to be the most safe.
It is unclear if Tesla’s insurance initiative will succeed and if it is truly the best insurance for Tesla cars. Critics claim that even though the company is familiar with its vehicles, it does not necessarily mean they are experts in the insurance business. Markel, an industry giant who has a lot of insurance knowledge, is Tesla’s partner.
Questions frequently asked
Why is Tesla insurance so expensive?
Teslas are expensive cars. Insurance rates are partly determined based on the cost of replacing or repairing them. Insurers must consider Teslas’ high-end electronics as well as their expensive aluminum bodies when setting rates.
Is Tesla Insurance available in your area?
Tesla Insurance was launched in California in May 2021. However, the company stated that it plans to expand into other states in the near future.
Is Tesla Insurance able to offer something that other companies don’t?
Tesla Insurance coverage options can be similar to other insurers. Tesla offers options that are tailored to Tesla cars. These include coverage for your Tesla’s electric wall charger or discounts for using the autopilot feature. You may also benefit from the company’s more detailed knowledge about the specific needs of these cars.
Is Tesla Insurance different based on the model?
Tesla adjusts its premiums to the model that the driver wants to insure, much like other insurance companies who base their risk on vehicle information. Tesla currently offers insurance for all Model S, Model X and Model Y owners in California.
Which other states will Tesla expand in?
Tesla filed in Texas and Illinois as of May 2021. They are partnering with the insurance underwriters Redpoint County Mutual Insurance Company (IL) and Midvale Indemnity Company (IL). As growth permits, the company intends to expand to all 50 United States.
