For many Tesla owners, auto insurance costs are a source of financial burden. A company called 24/7 Wall Street listed the Tesla as one of the most expensive vehicles to insure. Considering the automaker is trying to build a reputation for building the safest vehicles in the industry, with advanced technology that assists drivers in avoiding crashes, this high cost for insurance has been a source of frustration for both Tesla customers and the company itself. The chance of being in an accident in a self-driving car is 90% lower than in a manned car. But self-driving cars aren’t as accessible for most drivers, especially when you factor in the cost of auto insurance. Luckily, Tesla plans to launch an insurance program that will lower costs for owners of its vehicles.
Currently, Tesla drivers can get auto insurance through most of the major insurance companies and even through InsureMyTesla. However, since even this partnered program isn’t cheaper than policies offered at many other insurers, Tesla is taking steps to reduce the cost of auto insurance for their drivers.
Here are a few commonly asked questions about Teslas and insuring electric cars, along with comparisons between Tesla’s auto insurance technology and other insurance companies.
In April 2019, Tesla CEO Elon Musk said Tesla would start selling insurance policies through Tesla Insurance Services, though the company still hasn’t formally announced the project. Since Tesla owners tend to pay higher costs for insurance, the company hopes to lower prices and offer additional benefits its drivers can’t find with other insurance companies.
State National Insurance will front Tesla Insurance Services and will help with coordinating the process of selling the insurance.
For many drivers, determining the cost-effectiveness of an electric car can be tricky. From tax credit to gas prices to repair costs to insurance, there are many factors for drivers to take into consideration. When it comes to auto insurance, are electric cars cheaper or costlier? What effect will purchasing an electric car have on your insurance premiums?
On average, the electric version of a car has a premium rate of about 23% higher. If your gas car costs you $1,000 a year to insure, an electric version of that car could cost you between $1,180 and $1,320 a year. However, premiums vary based on many factors, including your location, your driving history and the coverage you select. They also differ from insurer to insurer and can sometimes be quite noticeably different for electric vehicles.
For example, the Ford Focus has both a gas and an electric version. At State Farm, the electric version is approximately 1.07 times more expensive than the gas car. At Allstate, the electric version of the Focus is around 1.23 times more expensive. Through GEICO, the electric version is about 1.24 times more expensive. While State Farm doesn’t charge much more for electric cars, Allstate tends to charge quite a bit more to insure electric vehicles.
So, why does insuring an electric car tend to be more expensive? Though driving an electric car may not make you a riskier driver, you do become a greater liability to insurance companies because electric cars are more expensive than gas cars. Cars with a higher purchase price are also costlier for insurers to repair or replace.
For example, the electric version of the Chevy Spark is about $26,000, while the gas version is only about $13,000. That’s about a $13,000 difference — double the cost of the gas car. If you totaled your electric Chevy Spark and needed to replace it, that would cost your insurance company twice the cost of replacing a gas Chevy Spark. Your premium will be correspondingly higher.
Once electric cars start to become more of the norm, prices may likely decrease, and with them, repair and insurance costs. As self-driving cars become more widely available, we may even find our premiums are very low. That’s if there’s even still a need for personal auto insurance at all, since drivers can’t be liable for an accident that occurs while the car is driving autonomously.
Until the revolution of self-driving cars occurs, though, drivers need to make sure they have the appropriate policy, and that they do what they can to lower their repair costs and insurance premiums.
Tesla car insurance costs, on average, $2,450 per year. Your premium will depend on a variety of factors, however, such as your location, driving history and the model and trim you select.
When it comes to insurance cost, the Tesla Model 3 is the least expensive Tesla model from 2018 to insure. The most expensive is the Model S. Based on quotes provided by State Farm, Progressive and GEICO, the average costs for insurance by model are as follows:
Trims may also translate to different insurance rates, depending on the insurance company. Not all insurers take the vehicle’s trim into account, but some do, along with variances in vehicle costs and acceleration. A vehicle that accelerates from 0 to 60 in 2.5 seconds will likely be more expensive to insure than one that goes from 0 to 60 in 4.2 seconds, because the vehicle with faster acceleration also costs more to replace.
Teslas tend to have high maintenance and repair costs compared to other luxury vehicles. This higher expense is due to a few reasons:
Even a minor repair, like a fender bender, may cost thousands of dollars. As more technology and parts get added to the vehicles, the cost may also continue to rise. Though the technology built into Teslas should reduce the likelihood of crashes, when they do occur, expenses can be high.
One of the most significant reasons insurance is expensive for Tesla car owners is because of the high repair costs after a collision. As a result, collision coverage accounts for the majority of the total coverage cost.
Fortunately, Tesla has said it will focus on reducing costs by providing repairs services directly from its service centers, lowering the commission insurance companies normally take and adding on an autopilot discount through its new insurance program, Tesla Insurance Services.
Since repairs after a collision are some of the most expensive Tesla maintenance costs, Tesla intends to offer repairs internally for a fraction of the current industry rates. In doing so, they may also lead to lower rates for collision and comprehensive insurance.
The new insurance from Tesla will also offer discounts for the car’s autonomous driving capability level. For example, an autonomy level of one will get you a discount amount of 5%. An autonomy level of one refers to cars that can control only one specific feature autonomously, such as the steering. On the other hand, if your autonomy level is five, you will get a discount amount of 30%. An autonomy level of five refers to cars that are fully autonomous in any driving situation. The discount will apply to a policy’s collision coverage, MedPay and liability, but doesn’t impact comprehensive coverage.
Tesla hasn’t suggested they’ll make use of telematics to track driving habits for rate adjustments, while other insurers like Root Insurance and Progressive use smartphone apps or plug-in telematics that adjust your rates according to your driving habits. With Tesla’s insurance, drivers may be eligible for a 20% discount for no at-fault accidents or tickets within the last three years. If you can go for five years without any accidents or tickets, your discount can increase to 35%.
Though discounts may vary by driver, Tesla’s insurance will include discounts that are generally available from other insurance companies as well:
With the available Vehicle Automation Package, Tesla drivers may view switching over to Tesla Insurance Services from another insurance provider to be even more appealing.
Additional coverage that may also be available through other insurers includes the following.
Though Teslas have been notoriously expensive to insure, Tesla is taking the needs of their drivers into account with their insurance plans.
It’s too early to compare Tesla Insurance Services with rates from other insurance companies since Tesla Insurance Services are not yet available, but Tesla has partnered with Liberty Mutual through their program, InsureMyTesla. This plan is available for both existing and new Tesla owners.
This program doesn’t offer significantly different coverage from other insurers, but the underwriting for policies does account for all the safety and technology features included in that Tesla model. InsureMyTesla also isn’t cheaper than coverage from many other insurers.
Beyond InsureMyTesla, Tesla owners can also purchase insurance from other companies of their choosing. Among the largest insurance companies, the cheapest insurers for Teslas vary based on which model you have, along with your driving history and location. Progressive offers the lowest rates for insuring a Tesla, but GEICO offers the least costly insurance for a Model 3. For the Model X, however, GEICO’s rates were higher than Progressive’s by 28%.
Some companies may specify upfront whether they generally offer lower or higher quotes for Tesla owners. They base these differences on the safety data they’ve collected. For example, Root Insurance began offering a discount for drivers whose Teslas have the Autosteer feature, after a report from the National Highway Traffic Safety Administration that showed a correlation between Autosteer use and lower crash rates.
On the other hand, AAA increased its rates for Tesla vehicles due to higher claim severities and claim frequencies for the Tesla Model X and Model S compared with other vehicles in their class.
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We’ll help you find the best insurance for a Tesla Model 3, Model S or Model X using our powerful insurance network. At David Pope Insurance, our focus is on helping clients keep their costs low while giving them the peace of mind that they have the coverage they need with high-quality insurance.
Providing excellent customer service is our priority. We complete quotes and answer questions the same day. We accept people with different driving records, new drivers and teen drivers, and offer flexible quotes to suit every driver’s needs. Call us at 636-583-0800 or request a free quote from us today!