How Does Tesla’s Insurance Stack Up To The Competition? My Case

5 years ago Kyle Field 0 Comments
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Tesla launched its new insurance offering earlier today, and as a Tesla owner in California, the logical thing to do was to put it head to head against another online insurance company. Doing this is not an exact science, as terms, deductibles, coverages, etc. vary slightly from company to company, and it requires a glimpse into my life — for that, I apologize up front.

Image courtesy: Tesla

Our Current Insurance

With esurance, we are able to put the Mercedes B-Class Electric Drive that my wife drives on our policy, which qualifies us for a multi-policy discount. Tesla Insurance can only be purchased for Tesla’s vehicles, which would force us to have a different policy for each vehicle. As this is a disadvantage Tesla opted into, I will compare our current pricing for insurance on the Tesla Model 3 with esurance with the cost of moving the Tesla Model 3 to Tesla Insurance.

We currently pay $89.36/month for esurance for our 2018 Tesla Model 3, billed every 6 months. That coverage is split into vehicle coverage at $322.18 for 6 months and general liability at $214 for 6 months. Together, they net out to $89.36 per month.

Going With The Gecko

To get a quote for insurance without any discounts, I turned to the geckos at Geico. Geico famously aspires to save you 15% or more in 15 minutes. Fortunately, it didn’t take that long, but they didn’t save me any money, either. Moving just my policy to Geico required me to enter my wife’s information as well, presumably to account for the smaller number of miles she will invariably put on the car.

Geico has slightly different policy limits, so I was forced to use $300,000/$500,000 for Bodily Injury coverage (vs the standard $250,000/$500,000). Stubbing my data in at Geico translated to $136.63/month, or $819.78 for 6 months.

Tesla Insurance

Flipping the same coverage limits over to a Tesla Insurance policy is just a matter of a few clicks at tesla.com/insurance and quickly returns a generic quote. Scrolling down, the quote can be tailored to your specific needs by selecting “Customize Coverage” and tweaking each coverage item. It’s a very similar process to esurance and quickly returns an updated monthly premium.

In my case, the premium at Tesla was $142.25 yesterday, but the company has apparently updated its pricing algorithm since then. The update translated to a new premium of $122.42/month for comparable coverage.

Today’s rate at Tesla Insurance.

Financial Breakdown

Breaking that down to dollars and sense, the current rate I have at esurance is the best at $89.36 per month. esurance gets an edge over Tesla due to the multi-policy discount, but this is something that Tesla chose as a business strategy. For me, to switch to Tesla in real life, Tesla Insurance must overcome that discount without the ability to add a second vehicle.

Unfortunately, at $122.42/month for Tesla Insurance, it seems I won’t be making the switch anytime soon. I could tune the policy with lower coverage or higher deductibles to make it work, but it is nonsensical to intentionally pay the same for worse coverage unless other factors are at play. As it stands, Tesla is $33.06 more per month than our current esurance policy for our 2018 Tesla Model 3.

To get a more accurate apples-to-apples comparison, Geico’s standalone policy at $136.63/month seems like a fair data point. In that case, Tesla’s insurance offers a slight discount since it’s $14.21/month cheaper.

Nuts & Bolts

Tesla is a new player in the insurance world, as the overnight pricing change due to an algorithm update proved. As with everything else done at Tesla, the company is taking a different approach, but in this case, the fundamentals remain the same. Can Tesla fast track repairs for customers with Tesla Insurance? If so, this could be an intangible benefit to going with Tesla.

The fact that loaner vehicles will come from the Tesla fleet is a bonus, as it should streamline the rental process and eliminate headaches associated with contracting with an outside company, reimbursements, etc. Tesla is creating a nice little ecosystem for owners to dive into for a more seamless vehicle purchase, service, repair, insurance, and, soon, ridesharing experience. The potential is clear, but at least for me, there isn’t a financial case to support cutting over to Tesla Insurance yet.

As with many things in the auto world, YMMV. Some Tesla owners have reportedly found big savings from switching to Tesla Insurance. Some, like me, have not. No one outside of Tesla has the aggregate result or average savings or loss. As we’ve written many times, on the matter of insurance, you need to check your own personal or household cost estimates.

https://twitter.com/tesla_truth/status/1167254764297408512

https://twitter.com/tesla_truth/status/1167278517609844736

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Kyle Field

I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, act responsibly, play. The more you know, the less you need. As an activist investor, Kyle owns long term holdings in Tesla, Lightning eMotors, Arcimoto, and SolarEdge.

Kyle Field has 1657 posts and counting. See all posts by Kyle Field