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The price of Tesla auto insurance is above average, with one study finding full coverage on a 2021 Model 3 Tesla at $2,257 a year for the average driver. But there are ways to save.

Tesla's lined up charging station

A Tesla may be one of the most cost-effective cars on the market right now. It runs fully on electric power, saving you hundreds to thousands of dollars on gas. It's also one of the safest vehicles. A dozen airbags, eight cameras and a rigid structure are part of the reason all models consistently earn a perfect safety score of five stars from the National Highway Traffic Safety Administration.

One would think Tesla car insurance would be cheap based on its safety rating. However, the cost of Tesla insurance is above average. According to Insurance.com’s 2021 study, full coverage on a 2021 Model 3 Tesla costs $2,257 a year for the average driver.

There are ways to save on Tesla car insurance with some know-how. Read on for a deep dive into the best insurance for Tesla Model 3 and other models, find out how Tesla insurance premiums compare from one state to another and the best rates among car insurance companies.

KEY TAKEAWAYS
  • The average insurance cost of Tesla Model 3 is $2,257 per year according to an Insurance.com 2021 study. It's $418 more than the average car insurance rate nationwide.
  • Specialized tools are needed for repairs, so not all shops can repair a Tesla. Fewer options and more expensive repair bills lead to higher insurance premiums to offset the insurance company’s liability.
  • Tesla offers its own insurance program in five states that gives coverage specific to the state-of-the-art electric vehicle.
  • You can bundle your insurance policies, get a Tesla insurance discount, and raise your deductible to save on the average Tesla insurance cost.

Are Tesla’s expensive to insure?

To insure a 2021 Tesla Model 3, the average driver would pay $2,257 a year. That’s nearly $420 more than the average car insurance rate nationwide ($1,839) for all vehicles and slightly above the average premium for a standard car, according to an Insurance.com 2021 study. The only vehicle type that would be more expensive to insure would be a convertible. Below are Insurance.com’s average rates (published last year) for other vehicle models: 

  • Vans; $1,443
  • Trucks; $1,684
  • SUVS; $1,729
  • Cars; $2,193
  • Tesla Model 3; $2,257
  • Convertibles; $2,442

Some of the reasons the Tesla insurance cost is higher than average car insurance include:

The cost of the model

Car insurance premiums depend, in part, on the cost of the vehicle. Based on a 2021 Insurance.com report, the Tesla Model 3 average insurance cost for vehicles with a base price of $46,990 is less than insurance for the Tesla Model S with a base price of $99,990.The Tesla Model 3 insurance cost in California is as low as $2,747 in our findings, compared to $3,872 or higher for the Model S.

How much a car is worth is important to car insurance companies because if you carry comprehensive and collision coverage, which you should with any new car or one that still has a decent value even if a little older, your insurer may need to pay out the value of the vehicle if your car is found to be a total loss. If your car is worth $40,000 -- or even $85,000 -- you’re going to pay more for these protective coverages than someone with a car worth $25,000 because the insurer would have to pay out more if you totaled your car.

More expensive to repair

Not all shops can fix a Tesla, Fewer repair shops means the ones that do cater to Teslas can charge higher prices. The tech can be complex and only original Tesla parts are typically available. Additionally, specialized tools are needed for repairs. 

The Edmunds True Cost to Own report analyzes the cost of Tesla repairs over five years. According to the findings, a 2019 Model S cost an owner more than $5,000 in repairs during the five-year period. Pricey repair costs contribute to higher insurance premiums because insurance companies have to pay out more for accident claims to repair your damaged Tesla, and that cost gets passed on to you by way of higher average Tesla car insurance rates.

The bells and whistles of tech that are built into the Tesla may help with safety, but also pump up the price of car insurance, as those features cost a lot to repair if damaged in an auto accident.

Some areas are more sensitive to expensive damage

Someone tapping your standard car's bumper may be a small nuisance -- but it could be a big issue if it happens to your Tesla. There are camera sensors on the bumper that can be damaged if someone hits your bumper. And for the system to work seamlessly, calibration may be necessary, even if it's only a small fender bender.

Unibody construction

Tesla is moving towards unibody construction -- larger aluminum panels to achieve better stability and safety. This means a larger area of the vehicle may need to be replaced in case of damage, even if it's small. The extra labor and larger pieces to repair can again raise the price of insurance because the companies know the cost of repairs is high.

Location—and other rating factors

Car insurance companies use many rating factors, the car and the types of insurance you choose are a couple. Your age, driving experience, driving record and claims history are others. But the main factor used as the base quote from which to build off, and then adjust up or down depending on your driver profile, is where you live.

Some states have a higher average Tesla insurance cost than others. That’s because the state and city you live in plays a role in what you pay for insurance. The cost and frequency of claims and natural disasters in your area, among other factors, are taken into account by insurance companies when setting your rate. As you'll see in the average Tesla insurance rates by state below, rates can vary dramatically. Insurance.com’s study found that Tesla Model 3 insurance cost is highest in Missouri at $3,546 per year. Idaho, the state with the cheapest insurance for the Tesla 3, is less than half the cost of Missouri Tesla insurance, at $1,505 per year.

Tesla leasing insurance requirements

When leasing or financing a Tesla, you’ll pay more for insurance because you’ll be required to bump up your coverage. Tesla leasing insurance requirements from financing companies and lenders will require you to purchase more than basic liability coverage. You’ll need a full car insurance package including collision and comprehensive coverage to pay for any damages or losses to the vehicle.

Tesla Insurance program

Tesla began offering its own coverage in August 2019 to provide customers with more affordable insurance. The EV manufacturer is on to something. According to Mike Brown of Breeze Insurance, “our recent study found that 66% of vehicle owners would be interested in buying auto insurance from an automobile manufacturer instead of from a traditional carrier.”

The Tesla Insurance program is underwritten by State National Insurance and currently only available to drivers in Arizona, California, Illinois, Ohio and Texas. However, there are plans on expanding to other states in the future. 

Real-time driving behavior plays a big part in the cost of Tesla insurance premiums. According to the company, insurance for Tesla Model S and Tesla Model 3 could be 20% to 40% lower for the average driver — and as much as 60% less for safe drivers.

Besides the lower price, the Tesla Insurance program provides unique coverages specific to the state-of-the-art electric vehicle. You can add these additional offerings to your base coverage (for a cost).

What does Tesla insurance cover?

  • Autonomous vehicle owner coverage: Its most unique coverage, autonomous vehicle coverage is not available through other car insurers. Tesla Insurance will provide liability coverage for property damage or bodily injury if your car gets in an accident while operating in autonomous vehicle mode.
  • Wall charger coverage: You'll have up to $3,000 available for loss or damage of the power charger as long as the damage isn't from a manufacturer defect or negligence, according to Insurance.com’s 2021 report.
  • Electronic key replacement: Covers up to $500 per loss of your Tesla electronic keys. Coverage is limited to two claims per policy period.
  • Auto loan/lease gap insurance: The coverage will pay for the difference between the vehicle value versus what's owed in car payments if your Tesla is a total loss after an accident.
  • Cyber identity fraud coverage: A Tesla is one of the most technologically advanced vehicles. It's connected to a cyber network that may potentially expose you to some risk. This coverage pays up to $15,000 in digital identity fraud losses per occurrence and up to $30,000 per period if your information is compromised, according to Insurance.com’s report.

How much does Tesla insurance cost in every state?

Besides the Tesla Insurance program, you can get coverage from all traditional car insurance companies. Are you wondering how much is insurance on a Tesla? Take a look at the average costs to insure a Tesla based on varying models, state and how it compares to the national average, according to Insurance.com’s 2021 study.

Tesla insurance calculator: Tesla Model 3 insurance cost by state

Tesla insurance rates are cheapest in Idaho and New Hampshire and most expensive in Louisiana; Washington, D.C.; Michigan; and Missouri. Tesla insurance Florida rates are on the high end at $2,966 per year on average.

AL AK AZ AR CA CO CT DC DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY

Tesla Model 3 insurance cost by state

StateAverage RateCompared to National Average
Alaska$1,900-$357 [-16%]
Alabama$2,294$37 [2%]
Arkansas$2,498$241 [11%]
Arizona$2,070-$187 [-8%]
California$2,994$737 [33%]
Colorado$2,516$259 [11%]
Connecticut$2,368$111 [5%]
District of Columbia$3,011$754 [33%]
Delaware$2,303$46 [2%]
Florida$2,966$709 [31%]
Georgia$2,716$459 [20%]
Hawaii$1,846-$411 [-18%]
Iowa$1,816-$441 [-20%]
Idaho$1,505-$752 [-33%]
Illinois$1,781-$476 [-21%]
Indiana$1,983-$274 [-12%]
Kansas$2,422$165 [7%]
Kentucky$2,348$91 [4%]
Louisiana$3,430$1173 [52%]
Massachusetts$2,230-$27 [-1%]
Maryland$2,302$45 [2%]
Maine$1,527-$730 [-32%]
Michigan$4,160$1903 [84%]
Minnesota$2,121-$136 [-6%]
Missouri$3,546$1289 [57%]
Mississippi$2,445$188 [8%]
Montana$2,640$383 [17%]
North Carolina$1,748-$509 [-23%]
North Dakota$2,015-$242 [-11%]
Nebraska$2,361$104 [5%]
New Hampshire$1,511-$746 [-33%]
New Jersey$1,934-$323 [-14%]
New Mexico$2,030-$227 [-10%]
Nevada$2,039-$218 [-10%]
New York$1,928-$329 [-15%]
Ohio$1,541-$716 [-32%]
Oklahoma$2,128-$129 [-6%]
Oregon$1,777-$480 [-21%]
Pennsylvania$1,826$1826 [-19%]
Rhode Island$2,741$484 [21%]
South Carolina$2,277$20 [1%]
South Dakota$2,551$294 [13%]
Tennessee$2,158-$99 [-4%]
Texas$2,815$558 [25%]
Utah$1,883-$374 [-17%]
Virginia$1,831-$426 [-19%]
Vermont$1,695-$562 [-25%]
Washington$1,905-$352 [-16%]
Wisconsin$1,599-$658 [-29%]
West Virginia$2,380$123 [5%]
Wyoming$2,698$441 [20%]

Tesla Model S insurance cost by state

StateAverage RateCompared to National Average
Alaska$3,353-$555 [-14%]
Alabama$4,162$254 [6%]
Arkansas$4,453$545 [14%]
Arizona$3,284-$624 [-16%]
California$4,062$154 [4%]
Colorado$4,318$410 [10%]
Connecticut$3,500-$408 [-10%]
District of Columbia$6,261$2353 [60%]
Delaware$3,660-$248 [-6%]
Florida$4,468$560 [14%]
Georgia$3,374-$534 [-14%]
Hawaii$2,738-$1170 [-30%]
Iowa$3,661-$247 [-6%]
Idaho$3,637-$271 [-7%]
Illinois$3,149-$759 [-19%]
Indiana$3,632-$276 [-7%]
Kansas$4,513$605 [15%]
Kentucky$3,357-$551 [-14%]
Louisiana$4,430$522 [13%]
Massachusetts$3,750-$158 [-4%]
Maryland$3,695-$213 [-5%]
Maine$2,929-$979 [-25%]
Michigan$8,032$4124 [106%]
Minnesota$4,230$322 [8%]
Missouri$6,834$2926 [75%]
Mississippi$3,856-$52 [-1%]
Montana$5,086$1178 [30%]
North Carolina$2,582-$1326 [-34%]
North Dakota$4,492$584 [15%]
Nebraska$4,476$568 [15%]
New Hampshire$2,526-$1382 [-35%]
New Jersey$2,801-$1107 [-28%]
New Mexico$4,194$286 [7%]
Nevada$3,411-$497 [-13%]
New York$2,820-$1088 [-28%]
Ohio$3,034-$874 [-22%]
Oklahoma$4,497$589 [15%]
Oregon$3,157-$751 [-19%]
Pennsylvania$2,843-$1065 [-27%]
Rhode Island$4,133$225 [6%]
South Carolina$2,928-$980 [-25%]
South Dakota$5,824$1916 [49%]
Tennessee$3,803-$105 [-3%]
Texas$3,938$30 [1%]
Utah$3,508-$400 [-10%]
Virginia$2,908-$1000 [-26%]
Vermont$2,969-$939 [-24%]
Washington$3,443-$465 [-12%]
Wisconsin$2,934-$974 [-25%]
West Virginia$4,091$183 [5%]
Wyoming$5,561$1653 [42%]

Tesla Model X insurance cost by state

StateAverage RateCompared to National Average
Alaska$2,612-$1078 [-29%]
Alabama$3,630-$60 [-2%]
Arkansas$4,406$716 [19%]
Arizona$3,298-$392 [-11%]
California$4,065$375 [10%]
Colorado$4,300$610 [17%]
Connecticut$3,968$278 [8%]
District of Columbia$7,497$3807 [103%]
Delaware$3,348-$342 [-9%]
Florida$4,850$1160 [31%]
Georgia$3,918$228 [6%]
Hawaii$2,517-$1173 [-32%]
Iowa$3,359-$331 [-9%]
Idaho$3,772$82 [2%]
Illinois$2,884-$806 [-22%]
Indiana$3,276-$414 [-11%]
Kansas$5,513$1823 [49%]
Kentucky$3,482-$208 [-6%]
Louisiana$3,914$224 [6%]
Massachusetts$3,601-$89 [-2%]
Maryland$3,287-$403 [-11%]
Maine$2,207-$1483 [-40%]
Michigan$6,968$3278 [89%]
Minnesota$3,549-$141 [-4%]
Missouri$5,853$2163 [59%]
Mississippi$3,842$152 [4%]
Montana$4,838$1148 [31%]
North Carolina$2,510-$1180 [-32%]
North Dakota$3,877$187 [5%]
Nebraska$3,800$110 [3%]
New Hampshire$2,612-$1078 [-29%]
New Jersey$2,444-$1246 [-34%]
New Mexico$3,533-$157 [-4%]
Nevada$3,441-$249 [-7%]
New York$2,794-$896 [-24%]
Ohio$2,753-$937 [-25%]
Oklahoma$3,833$143 [4%]
Oregon$3,161-$529 [-14%]
Pennsylvania$2,812-$878 [-24%]
Rhode Island$4,753$1063 [29%]
South Carolina$3,150-$540 [-15%]
South Dakota$4,944$1254 [34%]
Tennessee$3,404-$286 [-8%]
Texas$3,925$235 [6%]
Utah$3,170-$520 [-14%]
Virginia$2,317-$1373 [-37%]
Vermont$2,353-$1337 [-36%]
Washington$3,285-$405 [-11%]
Wisconsin$2,914-$776 [-21%]
West Virginia$3,052-$638 [-17%]
Wyoming$4,606$916 [25%]

Tesla Model Y insurance cost by state

StateAverage RateCompared to National Average
Alaska$1,697-$455 [-21%]
Alabama$2,427$275 [13%]
Arkansas$2,209$57 [3%]
Arizona$2,020-$132 [-6%]
California$2,603$451 [21%]
Colorado$2,858$706 [33%]
Connecticut$2,019-$133 [-6%]
District of Columbia$2,502$350 [16%]
Delaware$1,868-$284 [-13%]
Florida$3,097$945 [44%]
Georgia$2,383$231 [11%]
Hawaii$1,721-$431 [-20%]
Iowa$1,627-$525 [-24%]
Idaho$1,353-$799 [-37%]
Illinois$1,742-$410 [-19%]
Indiana$1,703-$449 [-21%]
Kansas$2,392$240 [11%]
Kentucky$2,533$381 [18%]
Louisiana$2,878$726 [34%]
Massachusetts$1,784-$368 [-17%]
Maryland$1,826-$326 [-15%]
Maine$1,222-$930 [-43%]
Michigan$4,202$2050 [95%]
Minnesota$2,107-$45 [-2%]
Missouri$4,721$2569 [119%]
Mississippi$2,023-$129 [-6%]
Montana$2,515$363 [17%]
North Carolina$1,825-$327 [-15%]
North Dakota$1,978-$174 [-8%]
Nebraska$2,768$616 [29%]
New Hampshire$1,195-$957 [-44%]
New Jersey$1,810-$342 [-16%]
New Mexico$1,930-$222 [-10%]
Nevada$1,746-$406 [-19%]
New York$2,122-$30 [-1%]
Ohio$1,397-$755 [-35%]
Oklahoma$2,155$3 [0%]
Oregon$1,639-$513 [-24%]
Pennsylvania$1,466-$686 [-32%]
Rhode Island$2,300$148 [7%]
South Carolina$2,039-$113 [-5%]
South Dakota$2,732$580 [27%]
Tennessee$1,791-$361 [-17%]
Texas$3,638$1486 [69%]
Utah$1,728-$424 [-20%]
Virginia$1,522-$630 [-29%]
Vermont$1,349-$803 [-37%]
Washington$1,848-$304 [-14%]
Wisconsin$1,443-$709 [-33%]
West Virginia$2,692$540 [25%]
Wyoming$2,624$472 [22%]

Cheapest car insurance for Tesla models

Regardless of what model car you drive, comparing car insurance rates is one of the most effective ways to get the best deal. No two insurance companies will have an identical price for the same policy, but you won’t know which one is the cheapest unless you shop around. Here what Insurance.com’s 2021 study found to be average car insurance rates for Teslas by carrier:

Tesla Model 3 Rates
CompanyAverage annual rate
Allstate$4254
Farmers$2752
GEICO$1626
Nationwide$1973
Progressive$1853
State Farm$1421
CompanyAverage annual rate

5 Ways to save on Tesla insurance cost

If you're looking to save on your Tesla insurance cost, there are a few things you can do to drop your premiums. Although Tesla car insurance may be higher based on the fact that it's considered an advanced luxury vehicle, it has a few positives that make it more affordable to insure. Consider the following ways on how to save on the Tesla insurance cost.

1. Compare Tesla insurance rates

Be sure to get quotes from at least three insurance companies. For example, you’ll see above that Tesla Model 3 insurance quotes can vary in price from around 15% to nearly 200% from one company to another. Getting a quote online takes a few minutes and doesn't come with any commitment.

Insurance.com’s study found that the cheapest Tesla insurance companies include:

If you live in Arizona, California, Illinois, Ohio or Texas, be sure to add the Tesla Insurance program to your shortlist of insurance carriers to compare. Tesla claims to save you as much as 60% on your Tesla auto insurance based on safe driving habits.

2. Bundle your insurance

If you also have rental or homeowners insurance coverage, consider bundling the two with the same insurance company. You may receive a discount as high as 20% when you have all your insurance with one company.

3. Take advantage of Tesla car insurance discounts

Insurance companies offer a variety of car insurance discounts. You may qualify for extra savings based on your driving habits, student status, low mileage, where you park your vehicle and more. Some insurance companies also discount premiums for drivers who own eco-friendly vehicles such as hybrids and electric cars.

4. Go electronic

There are a couple of simple steps you can take to get a small discount on your Tesla insurance cost. Signing up for paperless billing to view your bills online instead and opting for automatic payments deducted from your bank account is convenient and could earn you about 5% off on your insurance bill.

5. Raise your deductible

Raising the deductible you'd need to pay in case of a claim could save you money. A higher deductible makes your Tesla auto insurance cheaper. Make sure you don't overdo it in order to save on your payments. If you're involved in an accident, you'll need to pay your deductible out of pocket before your insurance company pays the rest.

Tesla car insurance FAQs

Does Tesla have their own insurance?

Tesla offers its own vehicle insurance program with rates based on driving behavior. However, Tesla Insurance is only available in in Arizona, California, Illinois, Ohio and Texas at this time.

Is Tesla's insurance program cheaper than other insurers?

Safe drivers could find that Tesla Insurance is cheaper than other carriers. According to the manufacturer, insurance for Tesla Model S and Tesla Model 3 could be 20% to 40% lower — and as much as 60% less for safe drivers.

Does Tesla offer gap insurance?

Tesla does not offer gap insurance through its Tesla Insurance program. However, you may purchase gap coverage through many of the major insurance carriers.

Final thoughts on Tesla insurance

A red Tesla.

Tesla vehicles are not cheap to buy -- new or used.  While many cars rapidly depreciate the first year Teslas are known to keep their resale value. A report by iSeeCars found that the Tesla Model 3 depreciated only around 5.5% during the first year while most cars depreciated around 20%. Having a car worth a decent amount means you want the best protection on this asset.

Full coverage, which includes the state-mandated minimum of liability insurance plus comprehensive and collision coverage is highly recommended to protect yourself financially, regardless of the circumstances. 

If you finance or lease your Tesla, full coverage will be required, with higher liability limits (what pays out if you damage others) than state requirements. Higher limits are always smart to carry as it gives you more protection. The ideal amount is 100/300/100, rather than what states require to drive legally, which is generally around 25/50/25. That means it is less likely your claim will exceed your limits.

Add-ons such as Uninsured/Underinsured Motorist coverage are also recommended. Lauren Mckenzie, an Insurance Broker at Learnandserve.org says, “By carrying Uninsured/Underinsured Motorist coverage, your bodily injury expenses if you were hit by an uninsured motorist will be covered. If you were hit by a driver who had lower liability limits than you, it would also fill the gap between the driver’s limits to make sure you are properly covered.”

Shopping around with your own current insurance carrier for Tesla rates is advisable, but then also get at least three comparison quotes to see what company offers you the best Tesla car insurance rates. And if you live in Arizona, California, Illinois, Ohio or Texas, be sure to check out the insurance Tesla offers, as it has special offerings the other insurance providers don’t provide, such as the autonomous vehicle owner coverage.

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