What Is Tesla Insurance?

The electric-vehicle builder uses behavior tracking to determine premium costs.

Andy Stonehouse | 

Aug 14, 2023 | 3 min read

Tesla

Owners of electric vehicles have discovered that insurance can be very expensive for their technology-laden automobiles, often 30% more than traditional cars. Tesla has responded by creating its own Tesla Insurance, which uses daily driving behavior to help establish premium costs and could save especially careful drivers as much as 60% on their monthly insurance bills.

As of July 2023, coverage is available for Model S, Model 3, Model X, and Model Y owners in 12 states and can also be purchased by Tesla owners for non-Tesla vehicles.

How Tesla Insurance Differs From Other Insurance Policies

Traditional automobile insurance coverage and pricing is usually based on demographic rating factors such as the age and sex of insured drivers, their driving record, and their previous insurance claims.

Tesla Insurance has opted to generate its rates with a Safety Score that uses onboard vehicle telematics to measure driver behavior and establish pricing based on an individual's day-to-day habits. Multiple factors are tracked over a 30-day period, including forward-collision sensor warnings, hard braking, aggressive turning, unsafe following distance, and forced disengagement of the Tesla Autopilot system.

Driving in a more conscientious manner will result in a higher Safety Score and lower monthly premiums. Tailgating and aggressive driving could result in higher premium costs. Other Tesla Insurance pricing factors include the vehicle model you drive, your location, how many vehicles you own, and the amount of driving you do per month. Tesla claims higher Safety Scores could result in 20% to 60% savings in premium costs.

Tesla also points out on its website that driving your vehicle between 10 p.m. and 4 a.m. might be considered risky behavior and could result in higher Tesla Insurance costs.

The Member Benefits of Tesla Insurance

Tesla Insurance is more customized to the world of EVs, with coverage such as an Autonomous Vehicle protection package to cover accidents while the vehicle is being driven by Tesla Autopilot as well as damage to or loss of wall chargers and replacement of Tesla's electronic key. Traditional automobile insurance coverages, such as comprehensive and collision coverage as well as bodily and property damage liability, are also offered.

In line with much of the Tesla experience, claims are handled entirely through a dedicated Tesla app, which also doubles as an electronic insurance card. Users can purchase or adjust their level of coverage and file claims via smartphone. They can also monitor changes to their Safety Score, which could provide some motivation to drive more carefully.

The Limitations of Tesla Insurance

At present, Tesla Insurance is only available in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia with coverage available to Tesla owners, including their non-Tesla vehicles. In California, the telematics-based driving behavior is not used when generating Tesla Insurance costs.

Tesla Insurance has not been rated by consumer-satisfaction agencies such as J.D. Power nor has it received financial ratings from agencies such as Standard & Poor's or AM Best.

Andy Stonehouse

Andy Stonehouse literally fell into the world of auto writing while working as a ski-town journalist, and has not looked back since. A childhood spent dealing with the eccentricities of a 1976 MG Midget has made any subsequent auto experience a more safe and reliable drive. He has been blessed with nearby mountain trails and snowy roads in Colorado to do TV-adventure-styled test drives on a weekly basis.