What is the Tesla Insurance program?

Tesla offers an alternative to the traditional insurance model, which calculates rates using a driver’s personal information. Instead, Tesla Insurance rates are based on driving habits, the coverage selected, the vehicle's garaging address and the model. Rates are calculated at the end of every month.

Tesla Insurance uses telematics to calculate a Safety Score based on driving habits, such as braking, speed and the time of day. Safe-driving habits result in a higher score and potential savings on your insurance rates. However, California doesn’t allow Tesla Insurance to use telematics to determine rates. 

Coverage levels also affect rates. Higher coverage means the insurance company would have to pay more if there’s a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing., so rates are higher. Tesla Insurance offers liability insuranceLiability insurance covers sums that an insured becomes legally obligated to pay because of bodily injuries or property damage, or financial losses caused to other people., other coverages required by state law, and options such as collision and comprehensive.

Where you keep your car also affects rates. For example, drivers living in areas with high theft and vandalism rates often see higher insurance premiums.

Finally, the vehicle you insure affects rates. While all Tesla vehicles, including the Model S, Model 3, Model X, Model Y and Cybertruck, are eligible for coverage, pricier vehicles typically have higher insurance rates because they are more costly to repair or replace.

Although coverage is currently available in only 12 states, Tesla plans to expand its footprint.

Tesla Insurance coverage options

Tesla offers various types of insurance coverage, including policies that meet minimum liability requirements in states where it is available.

Tesla Insurance coverage options include:

Tesla Insurance will also file an SR-22 or FR-44 form if your state requires you to show proof of insurance coverage due to violations such as a DUI.

Depending on their state of residence, drivers may also be eligible for insurance discounts. Savings for defensive driving classwork, multi-car or group coverage, having an airbag or anti-theft device or being a good driver, elite driver or mature operator. 

Drivers in Texas and Arizona may be eligible for a 10% Full Self-Driving (Supervised) discount if they use the feature at least half of their driving time.

Benefits of the Tesla Insurance program

The Tesla Insurance program offers an alternative to a standard insurance policy. Since Tesla drivers already use their app to monitor and schedule vehicle maintenance, having the insurance component in the same place is convenient.

Additionally, Tesla Insurance is usage-based, so factors like age and credit score, which other insurance companies use, don’t affect rates. Safe drivers may find Tesla Insurance more affordable, as driving habits determine rates, not extraneous factors.

How does Tesla Insurance work?

Tesla Insurance is a usage-based program that bases rates on safe driving habits, coverage level, address, and vehicle. Unlike traditional insurance, non-driving factors like age and credit score don’t determine rates.

Since Tesla already gets vehicle information, the insurance program uses that data to create a Safety Score. This score is based on driving behaviors, and the better the score, the lower the insurance rates.

Driving behaviors used to determine insurance rates include:

  • Hard braking
  • Aggressive turning
  • Excessive speeding
  • Unsafe following
  • Late-night driving
  • Not wearing a seatbelt
  • Turning off autopilot

Because driving habits change often, Tesla Insurance charges rates based on the previous month. Drivers get real-time scores and can adjust their driving habits to improve their rates.

It should be noted that California does not allow Tesla to use the Safety Score to determine rates. Rates are determined traditionally, and the Safety Score is used only to inform drivers of their driving behavior.

Where is Tesla Insurance available?

Drivers can get Tesla Insurance in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah and Virginia. It has been approved to operate in Washington, but may not yet be available. 

However, Tesla Insurance in California differs slightly from that in other states. Unlike in other states, Tesla doesn’t use a Safety Score to determine rates. Although the Safety Score still appears on the app, it can only be used by drivers to identify areas where they can improve their driving habits.

Is Tesla Insurance good?

Tesla Insurance offers drivers usage-based coverage that is integrated into the Tesla app. It makes getting a quote, accessing policy information and filing a claim easy. However, there is no data on average rates since premiums vary based on the driver’s Safety Score.

So, is Tesla Insurance worth it? That depends on the driver. Drivers with excellent safe driving skills who may face higher rates with a traditional insurer may find Tesla Insurance their best fit. 

Tesla insurance vs. other insurance companies with usage-based programs

Tesla's program is largely usage-based, which means your rates are calculated in part based on your driving behavior. If you're looking to save one Tesla insurance with a usage-based program, there are a few other companies you can consider. Compare Tesla insurance vs. other major carriers to find the best deal.

State Farm Tesla insurance

State Farm already has the lowest rates on average for a Tesla, and also offers a usage-based program called Drive Safe & Save. Like the Tesla program, it monitors your driving habits to earn you a discount. State Farm offers a 10% discount just for signing up, and says your rates could be discounted by up to 30% after the monitoring period.

Nationwide Tesla Insurance

Nationwide offers two usage-based programs: Smart Ride and Smart Miles. One discounts your rate for good driving habits, while the other is based on the number of miles you drive. Our rate analysis found that Nationwide is the second-cheapest car insurance company for a Tesla, so a discount for driving habits could lower rates even more.

Pros and cons of Tesla Insurance

While Tesla Insurance can be an excellent option for some drivers, they should weigh the benefits before signing up for coverage.

Pros of Tesla Insurance include:

  • Ease of use. The Tesla app allows drivers to monitor their vehicle, get a quote, and manage their insurance policy.
  • Specific drivers may benefit. Traditional insurers use factors like age and credit score that don’t accurately reflect driving ability. Safe drivers may find lower rates since Tesla Insurance doesn’t use these factors to calculate rates.
  • Coverage options. Tesla drivers can add coverages, such as roadside assistance and gap insurance, to tailor their policies.
  • Vehicle options. Drivers in California can add non-Tesla vehicles to their policies.

Cons of Tesla Insurance include:

  • Availability. Tesla Insurance is only available in 12 states.
  • No bundling. Since Tesla only offers auto insurance, drivers can’t bundle policies, such as home or renters insurance. Other than in California, you can only insure a Tesla on your policy.
  • Service. Tesla requires drivers to handle insurance issues, such as getting a quote and filing a claim, through the app. It’s challenging to speak with a customer service representative.
  • Scoring. Drivers may receive a low Safety Score due to factors beyond their control, such as sharp curves or other drivers stopping short in front of them.

Many insurers offer usage-based insurance, and the pros and cons are similar.

“Usage-based insurance is a good way for insurance companies to accurately price a driver’s risk, as it’s based on your specific driving patterns. It could be a more cost-conscious option for drivers with safe, responsible habits,” said Aaron VanTuyl, communications manager for the Washington State Office of the Insurance Commissioner. 

“The main drawback is the privacy concerns, but if you’re comfortable sharing your information with your insurance company, usage-based insurance could be the right option.”

How to get Tesla Insurance

Drivers can get coverage through the Tesla app. Owners must have their VIN and driver’s license number to get an insurance quote. The app also allows policyholders to add vehicles and drivers.

Once your Tesla Insurance policy is in effect, you can download policy documents, make changes, and submit a claim.

Although Tesla recommends that drivers get a quote and handle all policy changes through the app, drivers can call 844-34-TESLA (844-348-3752) if they are having trouble.

FAQ's

Is Tesla Insurance available in NY?

No, Tesla doesn’t currently offer coverage in New York. However, residents can insure their Tesla with a traditional insurance company and find affordable rates by comparing quotes.

Can you get Tesla Insurance without owning a Tesla?

While you can add non-Tesla vehicles to your policy in California, you must own at least one Tesla to get coverage. Tesla insurance is only available to Tesla owners in other states.

Is Tesla Insurance cheaper than GEICO or State Farm?

Most traditional insurance companies, including GEICO and State Farm, use several factors to determine insurance rates, such as age, driving record, vehicle type, and credit score. Tesla Insurance only uses the vehicle, coverage amount, and Safety Score to determine rates. Young drivers with a bad driving record or a poor credit score may find cheaper rates with Tesla Insurance.

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