The Tesla electric cars are crafted to be the safest, most reliable vehicles on our roads. In recent 2020 safety reports, it was found that Tesla registered one accident for every 4.53 million miles driven in the Autopilot mode. This is just one-third of the crash rate of other cars.
Additionally, in 2018 Tesla’s Model 3 accomplished the lowest injury probability of any vehicle ever tested by the National Highway Traffic Safety Administration (NHTSA).
Despite this impressive safety record, you’d be surprised to find out that the overall insurance cost for Tesla is often higher than other popular cars. This is due to the high repair costs which in turn increases the coverage price for collisions.
Why Is Tesla More Expensive to Insure?
The biggest contributor to the overall insurance cost for Tesla is the collision coverage since the repair and maintenance of their car parts is highly expensive even in comparison to other luxury cars. The major reasons for this increased cost include:
- Tesla sells electric cars which are generally more expensive to repair hence increasing the insurance.
- The cars can only be repaired and undergo maintenance at limited Tesla approved repair shops. To get qualified, these shops need sufficient training and expensive equipment which is made up for by the high cost of repairs.
Therefore, even repairs for a minor fender bender incident can cost thousands of dollars. With all the integrated technology and customization available in a Tesla automobile, the cost of collision continues to rise, escalating the insurance costs with it.
What Is the Best Insurance for a Tesla?
After thorough research, we calculated that the yearly average car insurance cost for a Tesla is $4,500 per annum. The actual price of your insurance policy, however, will be decided based on which model/variant you opt for, the trim you choose, and the amount of coverage you require. Your geographic location and driving history can also impact the final cost quoted to you.
This may come off as a surprise but the latest Tesla model, the Model Y, happens to be the cheapest to insure while the Model S and Model X are the most expensive. Even though the Model Y isn’t Tesla’s cheapest car, its insurance still costs significantly lesser as it’s a slightly large version of the Model 3 – and these variants cost lesser to repair.
On the other hand, the Model S has an aluminum body frame while is more expensive to repair than the usual steel frame; hence the higher collision cost.
How Much Does It Cost to Insure the Different Models?
We compiled the different average insurance costs per year of each Tesla model in the state of California. Arranged in the order of increasing insurance, this data is based on quotes provided from the biggest auto insurance companies in the region including Progressive and State Farm.
Starting Buy Price – $45,690
Insurance Price – $3,087*
Starting Buy Price – $39,990
Insurance Price – $3,655*
Starting Buy Price – $80,000
Insurance Price – $4,852*
Staring Buy Price – $74,690
Insurance Price – $5,119*
While the insurance cost of Teslas varies depending on the model, it is essential to remember the potential impact that different trims can have on the total price before picking their vehicle. While all insurers don’t necessarily vary their quotes based on the trim, quite a lot still do.
If you pick an insurer that bases total cost on trim, they will take into account vehicle cost, acceleration rate, and several other features before offering you different premium insurance policies.
For example, if you buy a Model S with a 75D trim, it is likely to have a lower insurance cost than the same model with perhaps a more expensive trim like a P100D. This is because the P100D automobile costs almost $50,000 more than the 75D trim and can reach 60 mph is merely 2.5 seconds (the 75D trim takes almost double of that time.)
Now that we’ve studied about all the factors that come to play when deciding about an insurance cost for a Tesla, let’s look into the largest and most reliable companies that will ensure your vehicle in case of an accident or emergency.
The Best Insurance Companies for a Tesla
The prices of buying, and insuring a Tesla can be quite exhaustive. While the automobile is truly worth its cost, we still want to be able to get the best value possible for its insurance. Doing thorough research before signing up with an insurer can save you up to $1000 per year.
Based on States
While the prices are lower in certain states, you’re still most likely to be paying quite a bit more than your neighbors with other popular cars. Out of the 25 most luxurious cars in the United States, the Model 3 has the highest insurance cost in most states besides New York (where Toyota Highlander LE takes first place).
Maine is the state with the best insurance for a Tesla Model 3, being the cheapest at $1,245 per year. On the other hand, Louisiana has the highest insurance cost of a whopping $3,436 per year. However, every state has multiple options to choose from. Be sure to ask around and figure out the most effective insurance policy for its price before signing up with one.
Here are some average annual rates of the Tesla Model 3 from some of the states. We also figured out the cheapest possible rate which ranged from $300 to $2,000 lesser than the average rates.
Average Rate: $1,469
Cheapest Average Rate: $686
Average Rate: $1,583
Cheapest Average Rate: $933
Average Rate: $1,618
Cheapest Average Rate: $793
Average Rate: $1,636
Cheapest Average Rate: $767
Average Rate: $1,702
Cheapest Average Rate: $997
Average Rate: $1,847
Cheapest Average Rate: $1,039
Average Rate: $1,857
Cheapest Average Rate: $827
Average Rate: $2,056
Cheapest Average Rate: $1,252
Average Rate: $2,130
Cheapest Average Rate: $1,021
Average Rate: $2,598
Cheapest Average Rate: $1,268
These costs can cumulate to become quite heavy on a car owner’s pockets. As it turns out, Tesla owners aren’t alone in their frustration over these exorbitant insurance prices. CEO Elon Musk has also repeatedly spoken out against them. According to him, the increased safety and durability of the cars should lower these costs.
Therefore in 2017 Tesla took the matters into its own hands to help provide a more affordable alternative to the people. Partnering with Liberty Mutual, the organization released a program called InsureMyTesla. Unfortunately, it didn’t quite work out and the website was taken down in the US with no formal announcements.
In August of 2019, however, the organization initiated a new plan to start selling its insurance policies in efforts to ease the burden of the insurance cost for Tesla owners – called Tesla Insurance Services.
Tesla Insurance Services – Cutting Insurance Costs for Drivers
This new plan, coming directly from Tesla, offers car owners the opportunity to avail insurance plans at about 20% lesser than the usual price. Although it’s currently only available in California, Musk has stated that the program will be introduced “anywhere insurance prices are high.”
Tesla claims that it best understands how a Tesla owner drives his car. They take into consideration all of the vehicle’s safety features as well as the crash avoidance systems to decide upon the final insurance costs.
An attractive element of the Tesla Insurance Service is that they cover several additional features that most insurers don’t, including electronic key replacements, wall chargers, and even identity fraud. This is paired with Tesla’s liability insurance discounts worth 5% up to 30% if the driver uses autonomous driving features.
All this comes together to offer drivers an average insurance rate of $2,363 per year for a Tesla which is significantly lower (almost by half) than the overall average found among insurers.
To makes things even better, families that have multiple Teslas are also offered a discount. Some other discounts include:
- Good driver Discount
- Persistency Discount
- Anti-theft Discount
- Airbag discount
These extra deductions in the cost are bound to making the organization the best insurance company for a Tesla.
How is Tesla Offering Reduced Insurance Costs?
Tesla Insurance Services is coordinated by State National Insurance to streamline the process of selling insurance policies most effectively. The two entities are working together on three basic strategies to reduce the rates:
Lower Repair Costs
As discussed previously, exclusive repairs are one of the main reasons why insurance cost for a Tesla is so high. To bring the cost down, the organization will “repair Tesla models internally at a fraction of what the industry is currently [charging]”. This will be done by getting the servicing and repair work done directly from the Tesla service centers.
Introducing an Auto-pilot Discount
Drivers using the Auto-pilot feature in their Teslas will be given a certain discount percentage based on the level of autonomy.
For Autonomy Level 1, in which the car can control only one specific function autonomously, the driver gets a 5% discount. While for Autonomy Level 4, when there is full-time autonomy in certain environments (for the complete trip), the driver qualifies for 25% off.
Lesser Commission Rates
One of the most significant actions taken by Tesla is the reduced commission rate on their insurance policies as compared to most insurers. While this takes away from the amount earned by the company, it greatly helps reduce the overall insurance cost per annum for the car owner.
While these new policies with all the discounts sound appealing, it’s still a good practice to compare quotes for your top three insurers before making your final decision. Thorough research on the varying prices based on the model type, trims, autonomy, and other features can help you save some major bucks.
*All premiums listed in this article are subject to change and do not reflect definitive quotes
Digital Marketing Director
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