Is Tesla Insurance Expensive? How Tesla Vehicles Compare


Electric cars have finally made their way into the mainstream of modern society, and Tesla has long since taken the lead. To protect your investment, you will want to make sure you have adequate insurance that suits your needs. As you begin your quest, you might wonder how much you will be forking out for the annual premiums. 

Tesla insurance can be on the expensive side compared to other types of cars on the road today. With the average annual premium now topping $4,500, Tesla owners will want to make sure they account for this in their budget. However, you can do some things to bring this cost down into a more affordable range in the end. 

You may still be wondering if the cost of insurance is prohibitive when deciding whether or not to buy a Tesla. Keep reading below, and you will find out much more information about this topic, including some advice that will help you lower the cost of Tesla insurance. 

Electric Cars and Insurance

From the outset, it is important to keep in mind that electric cars are still relatively new entrants in the transportation industry. As such, replacement parts can be expensive. This is a primary reason auto insurers today tend to charge higher premiums for electric vehicles. Tesla is undoubtedly included in this fact. 

3 Main Factors Impacting Tesla Insurance Premiums

It isn’t easy to pinpoint precisely what your Tesla insurance premium will be every year. This is because owners must consider several factors before a determination is made as to how much you will pay. Here are a few of the more essential guidelines that should be helpful for you to know. 

  • The Tesla model and trim that you drive – Any insurance company you choose will price your premium differently depending on the exact Tesla you have purchased. The more upgraded your trim is, the more expensive you can expect your insurance to be. This is also dependent on the specific features you choose to include when you buy your Tesla. 
  • Your driving history and where you live – Like other types of vehicles, your Tesla insurance premium will depend on your driving record. It is vital to clear up any deficiencies, if possible, before going to insure your Tesla. Insurance premiums will also vary depending on the region of the country that you reside in.
  • How much coverage you actually need – Since every driver is unique, insurance is designed to be custom made to a certain degree. You will notice that Tesla insurance premiums can vary widely depending on what type of coverage you end up opting for. Things such as driver age and whether or not the vehicle is financed are factored into this, as is an individual’s risk tolerance for lower coverage limits. 

Average Premiums on 4 Tesla Models

As was already mentioned, you will notice insurance premiums on a Tesla carry different price tags depending on the model and trim that you are talking about. For example, one of the newest Tesla vehicles on the road today is the Model Y. It might surprise you to know that this model also has the lowest average insurance premiums. 

If you look at this further, you will discover that Model Y the largest crossover vehicle currently for sale in the Tesla fleet. It might not be the least expensive vehicle that Tesla offers, but it is in a category that insurers tend to reward drivers with by offering them lower premiums. 

With this in mind, it should not surprise you then to find out that the Tesla Model 3 has the second-lowest annual insurance premium on average. Once again, this is because it is in that crossover sector that insurers tend to favor. If the cost of insuring your vehicle is a major consideration for you, then this is definitely something that you will want to keep in mind. 

A comparison of Tesla insurance premiums reveals that its Model X is the most expensive to insure. This makes sense since it is the most expensive model in the entire Tesla fleet. That car will currently cost you an average of just over $5,100 to insure every year. 

Just to round things out, it would also be helpful to know that the Tesla Model S averages roughly $4,850 in annual insurance premiums. To determine just how expensive Tesla insurance is, you will also need to remember that the trim level you choose will play a significant role in your final bill. 

Auto insurers factor many things into determining insurance premiums. One of those involves acceleration. The principle is that the faster a car accelerates from a standing position, the more you can expect to pay in insurance. A Tesla Model S 75D accelerates to 60 mph in 4.2 seconds. As such, its insurance is cheaper than the Model S P110D. That one accelerates from 0 to 60 in only 2.5 seconds. 

9 Companies Offering Tesla Insurance

While there are literally hundreds of providers licensed to sell auto insurance in the United States, we will just focus on some of the major players. This will help to explain better the expense associated with Tesla insurance. It is interesting to note that specific models may be cheaper with one insurer, while others will be more expensive. 

Overall, it appears that Progressive is the cheapest place to go for Tesla insurance. However, this does not necessarily paint the entire picture for you. You will find, for example, that Progressive offers the lowest insurance rates on the Tesla Model 3, but the Tesla Model X is actually quite expensive to insure with them. This speaks to the importance of shopping around for insurance based on the Tesla model and trim that one has chosen to purchase. 

Here is a list of nine major companies offering Tesla insurance and their respective annual premiums in California: 

–      Progressive – $2,400

–      AAA of Northern California– $2,700

–      Tesla – $3,300

–      State Farm – $4,000

–      GEICO – $4,200

–      Farmers – $4,500

–      Allstate – $5,300

–      AAA of Southern California – $6,900

–      Mercury – $7,600

Keep in mind that these average premiums assume that the Tesla driver resides in the state of California. Other locations around the country can vary quite widely, but this should give you an idea of what you can expect to pay for insurance when you own a Tesla vehicle. 

To help mitigate the rising cost of insurance, Tesla has actually begun to offer its own policy to vehicle owners. Ironically, they do not typically offer the cheapest premiums around. However, many owners will appreciate the added discounts and benefits that often come with Tesla’s insurance policies. 

7 Discounts Often Available with Tesla Insurance

It was a few years ago that Tesla began offering its owners a policy that they created themselves. The aim was to help bring down the cost of insuring this type of electric vehicle. The reactions have been mixed, as the pilot project for this was only available to California residents. 

The goal here is to reduce insurance premiums by ensuring that only Tesla service centers perform necessary repairs. The commission charged by agents is also reduced, which is supposed to lead to lower premiums. While this has resulted in lower premiums than the average Tesla owner can expect to pay, it is still not the cheapest available on most models. 

To get the premiums even lower, Tesla offers the following discounts that many of its drivers may be able to take advantage of. 

  • Group rate discount – This is especially useful for large families or organizations with multiple Tesla’s to insure. By going with the same insurer, rates are often lowered quite significantly. 
  • Multi-policy discount – There is more to insurance than just an automobile. Having more than one policy with the same insurer is likely to bring a discount that can make Tesla insurance more affordable. 
  • Discount for airbags – Airbags reduce the potential for injury in the event of a crash. In exchange for having these properly installed, a discount is often available on Tesla insurance. 
  • Discount for being a good driver – This speaks to the importance of keeping a clean driving record. Before buying a Tesla, it would be wise to work to clean up a driving record if at all possible in order to qualify for this discount. 
  • Discount for taking a mature driver improvement course – Taking a driver improvement course from time to time demonstrates to insurers that you are serious about staying safe on the road. A discount is often offered in exchange for this. 
  • Discount for being loyal to the Tesla brand – The longer you stick with a particular insurance company, the more likely they are to reward you for your loyalty. This can often result in a discount on your annual Tesla insurance premium. 
  • Discount available for having an anti-theft device installed – Full-coverage insurance will typically provide a payout if the car is stolen. Having an anti-theft device will make it less likely that you will have to worry about losing your vehicle this way, so the insurance company may offer a discount. 

These are possible discounts that are not exclusive to Tesla. When deciding whether or not Tesla insurance is expensive, you must first consider the various discounts offered by different insurers. It could just bring the annual premiums down into a range that is once again affordable for many drivers. 

4 Types of Special Coverage Just for Tesla

It is no secret that Tesla vehicles are one of a kind. Perhaps this is why they are so expensive to insure. The uncertainty that often comes with repairing and maintaining them makes insurance companies a bit nervous. 

Because Tesla understands their vehicles better than anyone else, they also offer specific insurance that nobody else tends to have. For example, their policies have a Vehicle Automation Package that has already become quite popular with Tesla owners. 

The Vehicle Automation Package contains the following four types of special coverage available for Tesla drivers. 

Liability for an Autonomous Vehicle Owner

This will include coverage for Tesla occupants’ injuries when the car is operating in an autonomous vehicle mode. The limits to this coverage will go up to the same level of liability as it would be if you were to be driving yourself. 

Expenses Covered for Cyber Identity Fraud

With cyber identity fraud becoming a serious problem, Tesla insurance offers coverage to protect owners from being victimized by it. This benefit will cover up to $15,000 of damage per occurrence, up to a maximum of $30,000 for every policy year. 

Coverage for a Wall Charger

As you know, wall chargers are essential to the performance of a Tesla vehicle. They are also expensive to repair or replace. As such, this coverage can be quite valuable. It will provide up to $3,000 to the Tesla owner if the charger is damaged or lost.

Replacement for an Electronic Key

Electronic keys can also be prohibitively expensive to replace. This coverage will give you as much as $500 anytime you lose the keys that are provided with your Tesla. Remember that you may be limited as to the number of claims you can move for this benefit. 

4 Types of Coverage That Make Tesla Insurance More Valuable

Even with all of the discounts and benefits mentioned to this point, you may still be thinking that Tesla insurance is too expensive. This is why it is essential to be aware that many auto insurers have some lesser-known types of coverage that may benefit you. These will help make the cost of the insurance seem like more of a value. 

Here are four types of coverage that you may want to consider that bring added value to your Tesla insurance policy. 

  • Coverage for roadside assistance – If your Tesla were to happen to break down on the road, you would need to have it towed to a service center capable of working on it. This coverage will pay for that while also covering the vehicle’s quick charging should it run out of juice while you are driving. 
  • Coverage to bridge the gap for a loan or lease – Hopefully, it will never happen to you, but it is important to consider the cost of your Tesla being stolen or damaged beyond repair. If you still owe money on the vehicle, it needs to be paid back somehow. This coverage will pay for the difference, so you do not owe much, if anything, out of pocket. 
  • Reimbursement for a rental vehicle – If you need to put your Tesla in the shop for any reason, this coverage will pay for a rental car while you wait. Remember that this coverage is typically only available if you opt for higher-priced full collision coverage on your Tesla. 
  • A waiver of the deductible in the event of a total loss – Most insurance policies have a deductible attached to them. If your Tesla happens to be damaged and cannot be repaired, having this coverage in effect will mean that you no longer need to worry about paying for the deductible out of your own pocket. 

While these coverages do not necessarily bring down the cost of Tesla insurance, they can help you save money in other ways. Each of these coverage items can prove useful in its own way. 

3 Reasons Tesla Cars Can Be Costly to Insure

A logical follow-up question to this topic is why Tesla cars are so expensive to repair in the first place. The simple answer is technology. Because Tesla vehicles tend to use more involved technology than any other vehicle on the road today, they are also quite expensive to repair. 

Maintaining a Tesla vehicle is also expensive. You cannot just take your car to any service center. It is essential to take it to a professional who is specifically trained to work on this electric vehicle type. 

In a nutshell, here are three main reasons why Tesla vehicles tend to be more expensive to insure than other cars on the road today. 

  • Owners must seek out-Tesla-approved repair shops – There are specialized training and equipment involved in repairing and maintaining a Tesla vehicle. This adds to the cost. 
  • Electric vehicles cost more to repair – On the whole, electric vehicles contain parts that are expensive to replace. Insurance companies know this, so they are going to charge more for coverage. 
  • Certain Tesla models have an aluminum frame – The aluminum frame on the Tesla Model S, for expensive, is much more costly to replace than the typical steel frame built into most vehicles’ design. 

Of course, these reasons also help explain why the Tesla brand has become so popular so quickly. They are special vehicles that have definitely carved out a niche in the market. That is why Tesla owners are generally willing to pay a bit more to have their car insured. 

Wrap-Up

While Tesla insurance can be expensive, electric car owners can take solace in the fact that they will realize savings in other places. In addition, there are some practical ways that can effectively lower those insurance premiums over time. This is one of the many reasons why Tesla continues to be one of the more highly sought after electric vehicles on the road today. 

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Greg

Hi, I'm Greg. My daily driver is a Tesla Model 3 Performance. I've learned a ton about Teslas from hands-on experience and this is the site where I share everything I've learned.

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