Earlier this year Tesla announced plans to jump into the driver’s seat when it comes to insuring their line of technically advanced, luxury vehicles. Tesla has been approved to sell vehicle policies since 2018 when they became a licensed insurance broker authorised to write coverage on behalf of State National Insurance Company, Inc. To date the auto manufacturer has been solely focused on selling coverage to their largest car market, California.
The auto company claims they are able to provide their Golden State customers with insurance premiums typically 20% to 30% lower than other insurers. Sample rates are not available for review and plans to begin selling insurance in additional states has not yet been publicised.
Tesla Auto Insurance: The Cost
Tesla’s CEO, Elon Musk, has often expressed dismay that Tesla owners aren’t getting a bigger break on insurance rates since their cars have such impressive safety features, like standard self-driving technology and driver-assist. By giving Tesla customers a proprietary plan, they are able to enjoy discounted rates not offered through traditional insurers.
Reviews of big name auto insurance premiums for Tesla show an average of $1,913 for a Model 3, $2,473 for a Model X, and $2,963 for a Model S. Based on Tesla’s assertion that their coverage is around 20% lower than the norm, we can speculate that the manufacturer’s plans might instead cost an average of $1,531 for a Model 3, $1,979 for a Model X, and $2,371 for a Model S.
The reason Tesla cars are among the most costly to insure is because of higher-than-average maintenance bills, as well as inflated repair prices for fancy parts like sensors and lithium batteries. Plus there are a limited number of Tesla-approved repair shops and the auto shops that are certified find fixing a Tesla to be very complicated, expensive, and time consuming work. As the car company continues to develop even more advancements, a minor fender bender in the future will ring up even bigger bills.
Tesla vehicles produce a lot of data which State National now uses to more accurately price premiums and service insureds. Tesla also stated its insurance rates are lower because they don’t include traditional carrier fees but the nature of those fees haven’t been defined.
In addition to keeping base rates down, Tesla doesn’t skimp on discounts like good driver, anti-theft system, multi vehicle, autopilot, stability control, anti-lock brakes, and more. Of course, all car insurance is influenced by the named driver’s motor vehicle history.
Tesla Auto Insurance: The Coverage
Tesla Insurance is essentially the same as what other personal auto insurers sell. They offer a full coverage policy including liability, collision, and comprehensive (or other than collision). These policies provide for physical damages to both your Tesla and yourself, as well as to other vehicles and drivers stemming from a traffic accident. You’ll also get protection from things like having your Tesla stolen or vandalised.
Tesla Insurance’s website also advertises the availability of supplementary coverages like Auto Loan/Lease Gap and Autonomous Vehicle Protection Package. This unique add-on package includes insurance for Cyber Identity Fraud, Wall Charger, Electronic Key Replacement, and Autonomous Vehicle Owner Liability.
Tesla Insurance claims their policies can be bound in as little as one minute. If you’re waiting on the delivery of a new Tesla, you can still request a quote as long as the VIN number has been assigned. Customers are told they can change or cancel a Tesla Insurance plan at any time.
Tesla Auto Insurance: The Controversy
Warren Buffett, CEO of Berkshire Hathaway, predicted Tesla would meet many challenges as it ventures into the auto insurance industry. After Musk announced Tesla’s insurance plans, Buffett told reporters “It’s not an easy business. The success of auto companies getting into the insurance business is probably as likely as the success of the insurance companies getting into the auto business.”
Other critics of Tesla Insurance have expressed concerns over the lack of hardcore facts and statistics. No published premiums or quoting tools being the biggest sticking point for skeptics.
One thing Tesla has done is release information saying they have plans to “expand to additional U.S. states in the future” although no specific dates have been announced yet. Tesla Insurance may one day offer commercial auto insurance for ride-share drivers as well as they don’t do so at this time.