In August 2019, Tesla began selling its own insurance policies through a new company, Tesla Insurance Services. The insurance arm of the all-electric car company is assumed by State National Insurance, which coordinates the process of selling insurance. The actual risk of writing insurance policies is on Tesla’s shoulders.
Tesla Insurance is comprehensive coverage and claims management to support Tesla owners in California. While it’s not available right now in other states, the company does plan to expand to additional US states and other countries in the future. Tesla describes its in-house insurance as so financially competitive that it offers Tesla vehicle owners “up to 20% lower rates, and in some cases, as much as 30%.”
Of course, the cost of each Tesla Insurance policy varies based on the individual, including their driving record and other factors that can typically impact a person’s insurance rates. The cost of auto insurance for a Tesla will vary significantly based on the model and trim choices, as well as other factors that are normally taken into account when determining car insurance rates. Owners looking to insure multiple Tesla vehicles may also be eligible for further discounts.
Tesla Insurance is currently available to all Model S, Model X, Model 3, Model Y, and Roadster owners in California. Customers can request a quote before delivery on new vehicle orders once a VIN has been assigned.
Why Tesla Insurance?
Tesla says it is in a unique position to understand its vehicles, technology, safety, and repair costs, and, as a result, can eliminate fees taken by traditional insurance carriers. Pricing is reflective of Tesla’s active safety and advanced driver assistance features, which comes standard on all new Tesla vehicles.
Tesla Insurance offers coverage for:
- physical damage and bodily injury resulting from traffic collisions;
- liability that could also arise from incidents in a vehicle;
- additional financial protection against theft of the car; and,
- additional damage to the car for events other than traffic collisions.
In addition to base coverage, Tesla owners can opt for the Autonomous Vehicle Protection Package, which includes:
- autonomous vehicle owner liability;
- wall charger coverage;
- electronic key replacement; and,
- cyber identity fraud expenses.
Tesla made the decision to address the higher costs Tesla owners sometimes pay for car insurance. The company also has the capacity to offer additional benefits not available from big-name insurers. These reductions can emerge from:
- reducing repair costs by providing service directly from Tesla service centers;
- adding an Autopilot discount; and,
- lowering the commission normally taken by an insurance company.
Particularly, one of the main reasons insurance for Tesla cars is so expensive is the high cost to repair the vehicle after a collision. To combat this, Tesla will repair Tesla models internally at a fraction of what the industry is currently charging, which can lead to lower collision and comprehensive insurance rates.
Tesla says its insurance program is constantly evolving so it can provide a lower total cost of ownership and increased ease of customer experience.
The Tesla Data Collection Conundrum
Tesla does use what it calls “anonymized, aggregated data” to inform its Tesla Insurance rates. This includes accruing information about Tesla’s active safety and advanced driver assistance features. Tesla assures its owners, however, that Tesla Insurance “does not currently use data from individual vehicles, such as GPS or vehicle camera footage.”
They do note that plans are in the works to expand the Tesla Insurance product offerings to incorporate more types of data over time. For example, Tesla Insurance covers the personal use of a vehicle but does not extend to commercial activities like ride-sharing, which requires a commercial policy. Tesla Insurance plans to offer a commercial policy in the future to support the Tesla ridesharing network.
Want to Learn More about Tesla Insurance Coverage?
Check out these CleanTechnica articles that track the progress and scope of Tesla Insurance.
This article describes updates about the Tesla insurance program provided during Tesla’s Q2 2020 earnings call. Two areas of particular import that emerged are the first version of telematics that the company is developing. The second item is that coverage will be provided to all vehicles which sign on to become part of the Tesla ridesharing network.
In June, 2020 Tesla advertised for a UK program manager for its insurance and underwriting field. The full-time position, located in London, would require candidates to have knowledge of full compliance with all legal and regulatory requirements for customers using Tesla’s Full Self Driving (FSD) feature. With easy-to-digest language, Tesla insurance will focus on principles of Treating Customers Fairly within a one-click format. The new role also required that the candidate would be able to build a robust monitoring system for market research and product benchmarks across the UK.
What a surprise a Tesla customer received when it was time to renew insurance! The owner opened an email from Tesla Insurance and “had to read it twice.” They lowered the premium slightly, just enough to bring out a smile. The owner admitted, “This is 1st time auto insurance has ever lowered my premium on their own.”