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|Current Executives||CEO: Elon Musk|
CTO: Drew Baglino
|Number of Employees||45,000|
|Revenue (2018)||$21.46 billion|
|HQ Address||3500 Deer Creek Road|
Palo Alto, CA 94304
|Best For||Electric cars|
Tesla is known for everything from electric cars to solar panels, and that little bit about overpromising and underdelivering. It is an organization full of programmers and innovators, but even its latest move raised eyebrows.
Underwritten by State National Insurance Company, Tesla Insurance offers insurance plans for customers who have Teslas. Those insurance plans are supposed to be 20 – 30 percent lower than rates with other companies.
The company writes on its blog, “Because Tesla knows its vehicles best, Tesla Insurance can leverage the advanced technology, safety, and serviceability of our cars to provide insurance at a lower cost.”
So, what does this look like, in California and other states?
That’s what we’re about to show you.
We know insurance is important to you. It protects you and your family from financial losses, whether they are from damaged cars, fractured arms, or lost wages.
We know that the right insurance makes all the difference. They handle your claims, provide good customer service, and charge a little less than the other guy.
But, in your research, you may have found that car insurance can be confusing. There are technical terms like “deductibles” and “premiums,” issues with rates by a thousand different factors, and pesky loss ratios.
We understand. We’ve got you covered.
In this complete guide to Tesla car insurance, we’ll cover everything from Tesla’s financial ratings, its company history, its website, and, of course, its rates.
Strap yourself in. Let’s head to stretch one.
Ready to compare rates? Try our FREE online tool!
Tesla’s Rating Agency
Ratings are important. It’s why we have the New York Time’s Best Seller list, People’s Most Beautiful list, and Navigant Research’s autonomous vehicle companies list.
There is no doubt that Tesla has grown tremendously in the past few years in terms of overall revenue. But that doesn’t necessarily mean the company’s financial outlook is strong.
And if you’re looking to buy insurance from them, you will want to know if it’s a financially strong company.
That’s what we’ve got here, a mix of financial ratings and customer satisfaction ratings. So that you, as a current or potential buyer, know what your peers think of it.
We’re on stretch one. Let’s give it some gas.
– Better Business Bureau
The Better Business Bureau (BBB) is an organization that ranks businesses through numerous factors.
The rating methodology for businesses includes resolving customer complaints, any legal action filed against the business, and any advertising issues known.
BBB gives Tesla an A+.
Customers are somewhat mixed about Tesla, giving it a 3.1 out of five stars out of 96 reviews. There were 1,200 complaints closed in the past three years, which is more than GM, Ford, or Toyota.
– Moody’s Rating
Moody’s is considered one of the big three financial rating agencies in the United States. It issues credit ratings, economic outlook ratings, and overall financial strength ratings.
Moody’s gives Tesla a B3 rating. What does this mean? According to Moody’s methodology, “obligations rated B are considered speculative and are subject to high credit risk.” A 3 is the lowest sub-rating in the B category.
This B3 rating is for Tesla’s long-term global outlook, based on evaluating credit levels and the amount of revenue coming in. The company is considered stable and not on watch.
– S&P Rating
Standard and Poor’s (S&P) is also considered a big three financial rating agency in the United States. Like Moody’s, it issues credit ratings, economic outlook ratings, and overall financial strength ratings.
S&P gives Tesla a B- rating. This means, according to S&P’s methodology, that Tesla is at a higher risk of nonpayment than those with a BB or above.
It is still able to meet its financial obligations but may have trouble under adverse economic conditions.
The S&P wrote in May when it upgraded Tesla’s ratings, “The negative outlook reflects risks related to weaker than expected demand, ongoing profitability challenges, and the company’s lack of free cash flow over the next 12-24 months.”
It added that due to these factors and Tesla’s rising financial commitments, the company’s financial position might be unsustainable.
– Consumer Reports
Consumer Reports (CR) is an organization that allows consumers to rate their satisfaction with a company. It also rates products, such as mattresses, vacuum cleaners, and cars.
CR has not been positive about Tesla’s vehicles. The highest-rated vehicle is the 2019 Model S (78 out of 100), while the lowest is the 2019 Model X (just a 55).
However, in spite of the low CR ratings for Tesla’s vehicles, Tesla’s customers are satisfied, coming in at the top of all car manufacturers. Its customer satisfaction rating is 89 out of 100.
– Consumer Affairs
Consumer Affairs is a bit like CR without product reviews. Instead, it is a site where customers can rate a company and leave reviews.
Overall, consumers had mixed feelings about Tesla, giving it 3.2 out of five stars from 328 reviews. Some of these complaints had to do with customer service or the repair process. The purchase process was lauded by some.
Tesla was founded in 2003, the name in honor of Nikola Tesla who, along with Edison, was one of the two most impactful inventors of the late 19th century.
Its goal to supply American households with affordable, quality electric cars was simple in theory but difficult in execution.
Still, it attracted investor after investor, with current CEO Elon Musk supplying money each round. Today, the name is synonymous with electric cars and innovation. Flash and glam and great car release nights.
But we, here at AutoInsurance.org, know that you might care more about a company than just its products.
How it treats its employees, what it does in the community, even its position for the future can all play a role in whether you sign-up for them or not. How does Tesla measure up in these regards?
We’re heading into stretch two.
There are two components to Tesla’s market share. The first is the geographic area, such as California, the United States, or global. The second is between the electric vehicle (EV) market and the whole automotive market.
When it comes to the first, Tesla’s market shares are fairly small.
And while it’s tough to gauge its market share worldwide, The Driven reports that Tesla tripled its market share in Europe in the first half of 2019 from .16 percent to .54 percent.
The reason for the rise is from the Model 3 electric sedan, which, when released, became a best-seller in 2018. Due in large part to it, California’s EV market share rose above 5 percent for the first time.
This car has also helped Tesla further dominate the U.S. EV market, with 60 percent of all EV purchases in the first quarter of 2019 being a Tesla 3. That contributed to an overall EV market share of 50 percent.
What does this mean for insurance? As we’ll see, Tesla’s insurance only applies to Tesla owners, meaning that the larger its market share, the more potential customers it has.
– Tesla’s Position for the Future
Tesla’s future seems both bright and uncertain, a strange mix for a company that currently dominates market share in an upcoming industry segment.
While it generates roughly $5 billion in revenue each quarter, it scales up its production often dramatically, causing it to lurch in an uncomfortable financial position.
Moody’s and Standard and Poor’s both rate Tesla in the middle tier. This means it has a higher chance of not meeting credit obligations (paying back debt) than other, more highly-rated companies.
Standard and Poor’s actually rated its outlook as negative.
But there’s always the flip side. It dominates an up-coming market segment in electric vehicles, has the brand name to get people’s attention, and soon will be producing vehicles that appeal to middle-class workers.
This should all increase its revenue and market share significantly, especially if taxpayers are continuously rewarded for buying electric vehicles and the market shifts in that direction.
And then there is the insurance angle, which is why we’re here today. Tesla’s insurance is just for Tesla owners, meaning that the more it grows in market share, the more customers it might have.
All of which, we’ll cover in the rates section down below.
– Tesla’s Online Presence
Tesla has four social media outlets where it posts videos, images, and more.
Each has hundreds of thousands, if not over a million followers.
– Tesla’s Commercials
Tesla doesn’t have commercials per se, and as of late May had never spent a dime on paid advertising. But it has a YouTube channel, and some of the features there might be classified as commercials.
These include customer stories.
Tesla taxi brothers:
A Model S Family in Korea:
The Electric Family:
– Tesla in the Community
Corporate stewardship arises from the understanding that a company cannot exist as a separate entity from a community, whether that is a neighborhood, a city, a country, or the world.
As such, a company has a responsibility to act for the betterment of those communities, whether socially, economically, or through environmental issues.
Tesla does no straight work in the community. Or at least it doesn’t publicize it. Instead, it focuses on stewardship with a particular angle, one that falls in line with its products and mission.
That is environmental stewardship, the practice of improving our quality of energy sources and reducing our dependence on fuels that harm the environment.
To this end, its work in countries like Samoa or a continent like Europe aims to reduce dependence on fossil fuels and create energy that relies on natural sources or those that reduce overall energy consumption.
To promote this, it has uploaded videos to YouTube to represent success stories in its quest to change the world.
SoCal powerpack installation:
– Tesla’s Employees
We know commercials and corporate stewardship are important, but another part is, as well. How Tesla treats its employees can be seen as a reflection of the company’s priorities.
So what do employees think about it, and are there any awards that Tesla has won for company culture?
We looked at Forbes for the latter. Tesla has won awards for diversity, the inclusion of women, and a launching pad for new graduates.
|Year of Award||Award|
|2019||Top Regarded Companies (#30)|
|2018||Best Employers for New Grads (#89)|
|2018||Growth Champions (#31)|
|2018||World's Most Innovative Companies (#4)|
Its employees are not necessarily positive about Tesla, though its ratings on Indeed are similar to the ratings from major insurance companies like Allstate and Farmers.
Their qualms, including a brutal work schedule and some insecurity for their jobs, have been covered in detail by some outlets. On the other end of the ratings are the pay and benefits, the top-rated category.
|User Prompt||Rating (out of 5)|
|Pay & Benefits||3.7|
|Job Security & Advancement||2.9|
Reviewers on PayScale noted that the job is highly stressful, which may go in line with the work hours and insecurity of their jobs. Job satisfaction is good, however.
Reviewers on Glassdoor are a little less positive about Tesla than the ones on Indeed and PayScale. Just about half would recommend Tesla to a friend, though 65 percent approve of Elon Musk.
|Recommend to a Friend||51%|
|Approve of CEO||65%|
In general, it’s a mixed bag, with workers reporting high-stress levels and a poor work-life balance, but also high pay and good benefits. It also has average to good overall ratings.
Tesla is one of the rare companies where people might buy into the culture and the mission to an unusual extent, working more hours as a result.
Combine that with Elon Musk’s ethos and example as a CEO, and it may come as no surprise that there is a mixed bag of ratings and reviews, as employees have differing views.
To many, Tesla is controversial. That extends to its company culture and the demands it may place on employees.
– Cheap Car Insurance Rates
Tesla started offering car insurance on August 28th, revealing the insurance with a blog post on its website. It mentioned several points, including who would be included, in what states, and more.
- Tesla Insurance would be for Tesla owners only
- It would be available solely in California
- It would be 20 – 30 percent cheaper than getting insurance through other insurers
We’ll take a look at all three parts in this section.
Ready? Let’s start down stretch three.
– Tesla Availability & Rates by State
For now, Tesla Insurance is available solely in California. There is a chance Tesla will expand this and roll out its insurance plan nationally, but currently, it’s still tweaking its algorithm.
California’s car insurance rates are mid-to-high when compared to the rest of the country. So, what does this 20 – 30 percent lowered rate mean in The Golden State?
The savings range from about $1,000 compared to Farmers to $538 compared to USAA.
Because Tesla is looking to expand nationally at some point, we took a look at the average full coverage rates for all 50 states and compared them to the Tesla rate at 20 percent lower.
|STATE||Average Full Coverage Premium||With Tesla Discount||Savings With Tesla|
|District of Columbia||$1,330.73||$1,064.58||$266.15|
Keep in mind that each company prices Teslas differently in terms of insurance, so these numbers aren’t exact. One of the issues is these statistics take into account all cars, including gasoline-driven ones.
Electric cars are often more expensive to insure than gasoline-driven cars due to the price of the parts being used and the difficulty in finding a mechanic that can work on them.
So, why does Tesla believe it can offer a 20 – 30 percent discount? There are a few reasons.
- First: Tesla has high confidence in its advanced safety features and is prepared to lower rates accordingly
- Second: Tesla’s insurance pairs customers with Tesla repair shops, lowering the cost compared to another, regular shop
- Third: Tesla is cutting out the middlemen (agents) and can save money on commissions
As such, it believes it can offer reduced rates. Many users are reporting lower rates with Tesla compared to with Geico, AAA, and others, which, at that time, was due to a change in the algorithm.
– Average Tesla Male vs. Female Car Insurance Rates
California does not allow insurance companies to set rates based on gender. Other states are following suit.
– Average Tesla Commute Rates
Tesla is not particularly open about which factors it includes what it sets rates.
However, it notes on its Tesla Insurance support page that “the cost of each Tesla Insurance policy varies based on the individual, including their driving record and other factors that can typically impact a person’s insurance rates.”
Meaning common insurance factors can be used to set rates. This includes commute distance and annual mileage.
|Company||Commute Distance||Company Rate||Tesla Rate||Tesla Savings|
|Allstate||25 miles commute | 12,000 annual mileage||$4,979.93||$3,983.95||$995.99|
|Allstate||10 miles commute | 6,000 annual mileage||$4,086.25||$3,269.00||$817.25|
|Farmers||25 miles commute | 12,000 annual mileage||$5,462.84||$4,370.28||$1,092.57|
|Farmers||10 miles commute | 6,000 annual mileage||$4,535.69||$3,628.55||$907.14|
|GEICO||25 miles commute | 12,000 annual mileage||$3,150.55||$2,520.44||$630.11|
|GEICO||10 miles commute | 6,000 annual mileage||$2,621.93||$2,097.54||$524.39|
|Liberty Mutual||25 miles commute | 12,000 annual mileage||$3,284.23||$2,627.39||$656.85|
|Liberty Mutual||10 miles commute | 6,000 annual mileage||$2,786.10||$2,228.88||$557.22|
|Nationwide||25 miles commute | 12,000 annual mileage||$5,198.37||$4,158.70||$1,039.67|
|Nationwide||10 miles commute | 6,000 annual mileage||$4,108.79||$3,287.03||$821.76|
|Progressive||25 miles commute | 12,000 annual mileage||$3,115.09||$2,492.08||$623.02|
|Progressive||10 miles commute | 6,000 annual mileage||$2,587.19||$2,069.75||$517.44|
|State Farm||25 miles commute | 12,000 annual mileage||$4,355.54||$3,484.44||$871.11|
|State Farm||10 miles commute | 6,000 annual mileage||$4,049.89||$3,239.91||$809.98|
|Travelers||25 miles commute | 12,000 annual mileage||$3,687.49||$2,950.00||$737.50|
|Travelers||10 miles commute | 6,000 annual mileage||$3,014.07||$2,411.26||$602.81|
|USAA||25 miles commute | 12,000 annual mileage||$2,906.28||$2,325.02||$581.26|
|USAA||10 miles commute | 6,000 annual mileage||$2,482.96||$1,986.37||$496.59|
Tesla savings vary from $1,100 (against Farmers) to $500 (against USAA).
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– Average Tesla Coverage Level Rates
Coverage levels can range for numerous reasons.
The first is the number of coverages you have. If you have liability on top of comprehensive and collision, your coverage level is higher.
The second is the limits on your coverages. For instance, if you have a $50,000 bodily liability limit versus a $30,000 bodily liability limit, your coverage levels will be higher.
It is unknown what coverage limits Tesla will offer, but it will at least be 15/30/5. Those are the minimum liability coverages required in California.
- $15,000 for bodily injury or death per person
- $30,000 for total bodily injury or death per accident
- $5,000 for property damage per accident
Savings for Tesla Insurance range from $490 – $1,060.
|Group||Coverage Type||Annual Average||Tesla Annual Average||Tesla Savings|
This is based on its 20 percent discount.
– Average Tesla Credit History Rates
California does not allow insurance companies to set rates based on a person’s credit history. Other states are following suit.
We know that coverages are important to you. More coverage means more protection and with a Tesla, a $40,000 car (at least), that’s important.
But you may have found your research to be confusing. Some insurances are fairly well-known like liability, collision, and comprehensive. But there are some like medical payments that are not as well known.
Researching them may have given you a headache. We get it. In this section, we cover Tesla’s coverages, discounts, and its programs.
Let’s head down stretch four.
– Types of Coverages Offered
It is an unknown which coverages Tesla will offer, as it has none listed on its website. However, there are some typical coverages that companies offer.
Six are personal auto coverages.
|Personal Auto Coverage||Purpose||Example|
|Bodily Injury Liability||Will pay for the other drivers' medical bills/loss of income in an accident you caused||When the 25-year-old rock star you hit has broken his strumming hand|
|Property Damage Liability||Will pay for the damage to the property in an accident you caused||When the policeman insists you pay for hitting his vehicle|
|Personal Injury Protection||Pays for your medical bills/loss of income after an accident||When someone T-bones you and you get a strained neck|
|Uninsured Motorist||Helps you when you are in an accident with a driver who's uninsured||Because drivers in American have no chill|
|Underinsured Motorist||Helps you when you are in an accident with a driver who's underinsured||Because some drivers in America have more chill than others|
|Medical Payments||Helps pay for you and your passengers' medical costs after an accident||When the hospital comes a-callin'|
Two are vehicle coverages.
|Vehicle Coverages||Purpose||You might need it:|
|Collision||Pays for damages to your car in a collision with an object or vehicle||When an 80-year-old woman strikes your car from the rear|
|Comprehensive||Pays for damages to your car for situations not involved in a collision (theft, vandalism, etc.)||When a 16-year-old kid spray-paints your car|
And this special auto coverage is specifically mentioned on the website in the FAQ section of Tesla’s website.
|Special Auto Coverages||Purpose||You might need it:|
|Emergency Roadside Assistance||Will pay for when you need a tow, jump start, or more||When it's pouring rain and you're stranded on the side of the road|
The guess is that Tesla will roll out a complete auto insurance plan, with enough coverages to compete with the companies in California.
– Getting the Best Rate with Tesla
Discounts are also a bit of an unknown. However, there are four that Tesla mentions in its FAQ section. Three are demographic- or policy-oriented.
|Personal Auto Discounts||Details|
|Homeowner||Need to be a homeowner|
|Multiple Drivers||A discount for insuring more than 1 driver|
|Multiple Vehicles||A discount for insuring more than 1 vehicle|
The last is a particular focus of Telsa and a key selling point when it comes to its insurance.
|Advanced Safety Features||Examples: Anti-lock brakes, electronic stability control|
One discount Tesla has made clear it won’t have, at least initially, is telematics. This is fairly common with other insurance carriers and involves installing an app that monitors driving.
Tesla doesn’t have this now but indicates it might in the future.
– Tesla’s Programs
For its own insurance, there doesn’t appear to be a special program. However, at one point, it had a program through a partnership with Liberty Mutual.
It was called InsureMyTelsa and was supposed to lower rates for Tesla drivers, who had high rates even compared to other luxury car owners.
As of now, there’s no evidence of that program on Tesla’s website. It appears that it might have been shelved, as customers still complained of high rates and Tesla decided to roll out its own insurance program.
Canceling Your Policy
There is no information available about how to cancel a Tesla insurance policy. However, some general guidelines help a cancellation process go smoothly.
- First, there is generally a pro-rated refund if the customer cancels before their policy is up.
- Second, cancellation fees can vary. Often it depends if you’re canceling well before your policy is supposed to end.
There are a couple of problem areas to watch out for.
Don’t cancel your policy before having another in place. If you cancel without having another in place, you might be asked by your DMV to surrender your plates and tags.
Don’t just stop paying your policy and hope it will be canceled. If you do so, you might be charged for the grace period. Or even worse, you’ll continue to be charged for the overall policy.
Each company has its own steps to cancel. Often, you need to talk to your agent first. The company usually needs your termination request in writing.
Finally, have a specific cancellation date in mind. Make sure your new policy and old policy overlap by a least a couple of days.
Generally, you can cancel your policy anytime.
How to Make a Claim
If you’re in an accident or have another accident, the last thing you want is to have a stressful claims experience.
Tesla writes on its website, “To report or track a claim on an existing Tesla Insurance policy, call the number on your insurance card, which is available to download through your Tesla Account. An assigned claims specialist will support you through your entire claims experience.”
Even further, Tesla will pair you with Tesla Body Repair Centers where available, “which offer a quicker assessment and direct interaction with a specialized adjustor.”
How to Get a Quote Online
So, you’ve decided you’re interested in Tesla Insurance and want to get a quote. There are a couple of options.
- If you have an account, you can log in and get a quote online
- If you don’t have an account or would like to speak with an agent, you can call 1-844-34-TESLA (1-844-348-3772).
Tesla doesn’t have in-person agents or physical agencies so you’ll be dealing directly with the company.
Design of Website & App
We know there might be nothing more frustrating than trying to find answers through a company’s website if that site is confusing and poorly designed.
In this section, we take a look at Tesla’s website and app to see if they’re user-friendly. And if they have all the functionality you would assume of a technology company.
Tesla’s website is a storefront for its products, including its cars, solar panels, and insurance.
When you go to Tesla’s homepage, this screen pulls up.
Click on the three bars at the top right and insurance is one of the top selections.
You can also check out the charging section.
The main links at the top are for its cars. You also have a link to the energy section, which takes you to Tesla’s energy branch.
– How easily can you find answers?
If you’re searching for an answer, you have two options.
- Click through the links for more information
- Go to its Support page and use its search bar
There is not a search bar for the entire site.
– Is the design a plus or minus?
The site is laid out well, with easy access to numerous parts of the company. It’s well organized and easy to navigate.
– Mobile App
As Teslas are electric cars with advanced technology features, the app provides crucial functions. According to the iOS page for the app, there are at least 12 functions you can do with the app.
- Check charging progress in real-time and start or stop charging
- Heat or cool your car before driving – even if it’s in a garage
- Lock or unlock from afar
- Locate your vehicle with directions or track its movement
Those are just four. The app is well-reviewed on iOS and Google Play.
iOS: 3.8 2,200 reviews
Model 3 Mike: “Being able to adjust and readjust the climate remotely from my phone, including individual seat heaters, defrost, cabin temp, has been great this winter.”
Google Play: 4.7 8,433 reviews
Balamuhunthan Bala: “Love the app so far… great at response and the functionality behind is far ahead then anything I have seen…..”
– How easily can you manage your account using just the app?
In general, people are satisfied.
– Is the design a plus or minus?
There are no complaints about the design in recent reviews.
Pros & Cons
|Tesla has top model cars||They are very, very expensive|
|Telsa purports to have 20-30 percent lower rates than other insurers||Its policies are only available to Tesla owners in California|
|Telsa has gained more market share in the previous year||It has faced hundreds of millions of dollars in losses|
|Tesla has a mission to help out the environment||Its employees have a reported struggle with work-life balance|
The Bottom Line
Tesla is a company that inspires enthusiasm and trepidation at the same time.
It produces inventive ideas like car insurance for Tesla owners but incurs hundreds of millions of dollars’ worth of losses on occasion as its attempts to expand put stress on its revenue streams.
The vision for a world that is not reliant on fossil fuels, one that helps out the environment, is admirable. But Elon Musk sets an example that is tough to match and might put stress on Tesla’s workers’ work-life balances.
Its insurance proposes to cut rates by 20 – 30 percent compared to other insurers but there is uncertainty as to how it will succeed.
Fortunately, it has a stable underwriting partner in State National. It has an A rating from A.M. Best, meaning it has an excellent chance to meet its ongoing insurance obligations.
Will Tesla Insurance succeed? There’s no way to know for sure. However, if it goes like the other parts of Tesla, it will be an interesting ride.
Tesla Car Insurance FAQs
Every company as frequently asked questions. Here are five about Tesla Insurance.
– Is Tesla insurance expensive?
Tesla Insurance is supposed to 20 – 30 percent cheaper than other insurance from other carriers. A brief look at a Reddit thread about the rates indicates many users’ rates were decreased. However, the algorithm is still being adjusted.
– When will Tesla insurance be available?
Tesla insurance launched in late August. It is available now but only in California and only for Tesla owners. There are plans to expand the insurance availability nationwide, but there’s no definitive date on that expansion at this writing.
– Who underwrites Tesla insurance?
State National Insurance Company underwrites Tesla Insurance. It is a subsidiary of the Markel Corporation, which underwrites companies in many industries, including property and casualty insurance. State National has an A rating from A.M. Best.
– How does Tesla insurance work?
Tesla purports that its insurance is 20 – 30 percent cheaper than other insurers’. It does this by taking advantage of Tesla cars’ advanced safety features, pairing owners with Tesla Body Repair Centers, and cutting out agents by selling insurance directly.
– How do I buy Tesla insurance?
Tesla doesn’t have any in-person agents or insurance shops you can drop into, so you have to purchase insurance directly through the company. You can do so through its website or by calling 1-844-34-TESLA (1-844-348-3772).
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