Tesla Insurance Review – How Is Tesla’s In-House Insurance?
Last Updated on May 20, 2023
Tesla is a unique company for many reasons. Last year, Tesla became even more unique by launching its own in-house insurance service.
Today, Tesla drivers in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia can purchase insurance through Tesla. For some drivers, Tesla’s in-house insurance is the best option. However, there are pros and cons to Tesla’s in-house insurance – and Tesla has faced some growing pains in the rollout of its insurance.
How good is Tesla’s in-house insurance? What are the pros and cons of Tesla insurance? Find out everything you need to know about Tesla and its car insurance products today in our review.
Key Takeaways:
- Tesla Insurance is a car insurance product offered by Tesla to its vehicle owners in select U.S. states, with plans to expand to other states.
- Tesla Insurance claims to provide competitive rates and comprehensive coverage by using data from the vehicle’s sensors and Tesla’s knowledge of its technology, safety, and repair costs.
- Tesla Insurance also offers insurance using real-time driving behavior, which adjusts the monthly premium based on the vehicle’s monthly Safety Score and other factors like mileage and location. This feature is not available in California.
- Tesla Insurance can be purchased and managed easily through the Tesla app, where customers can also view their policy documents, insurance card, and billing details and make claims.
- Insurance Panda rates Tesla Insurance 3.3/5
What Is Tesla Insurance? How Does It Work?
In 2019, Tesla began offering in-house insurance services to Tesla drivers in California. The company plans to roll out its insurance to other states in the near future.
Tesla insurance works just like other insurance. Tesla is a registered car insurance provider in California. The company’s insurance division is titled Tesla Insurance Services, and it uses the insurance agency license number OL89098.
You can obtain a Tesla auto insurance quote in minutes online here: https://www.tesla.com/insurance
Like other car insurance providers, Tesla provides liability insurance, collision coverage, comprehensive coverage, and other insurance products.
Unlike other insurance providers, however, Tesla customizes insurance premiums based on data from your Tesla vehicle. Tesla gathers data using built-in sensors, allowing them to provide customized premiums based on your driving habits. By building a more detailed risk model for each driver, Tesla aims to provide hyper-customized insurance premiums. Instead of forcing customers into awkward risk categories based on demographics, Tesla analyzes the risk of each driver based on their driving habits, then charges premiums based on those driving habits.
For some drivers, Tesla’s analytics are a good thing: safe drivers can get rewarded for their driving habits. Infrequent or low-mileage drivers can pay lower premiums based on their risk.
For other drivers, Tesla’s analytics aren’t a good thing. Tesla’s built-in sensors could tell Tesla that you’re an unsafe, high-risk driver, for example, and that means you pay higher rates than you would with a traditional insurance provider.
Tesla has another advantage: they know their vehicles better than anyone. They know the repair costs, risk analytics, autopilot effectiveness, and other factors. Traditional insurance companies know less about these factors, so they charge higher rates to Tesla drivers, erring on the side of caution.
Pros and Cons of Tesla Car Insurance
Theoretically, Tesla car insurance sounds like a great system: drivers pay customized rates based on their unique driving habits. Good drivers pay lower rates, and bad drivers pay higher rates.
However, Tesla has faced challenges with rolling out its insurance coverage. Like many new insurance providers, Tesla has struggled with claim handling, for example, among other issues.
Here are some of the pros and cons of Tesla car insurance based on reviews from current Tesla policyholders.
Pros
Advantages of Tesla car insurance include all of the following:
Hyper-Customized Quotes from Built-in Sensors: Many insurance companies reward drivers who track driving habits using an app or install driver tracking systems. Tesla vehicles, however, already have built-in sensors. Tesla uses this data to provide hyper-customized insurance quotes. If your Tesla built-in sensors say you’re a safe driver, you’ll pay lower premiums.
Tesla Knows Their Own Vehicles: Most insurance companies are vehicle-agnostic: they insure any vehicle from any brand. That’s a good thing for drivers who want to switch between insurance companies. However, with so many differences between vehicles, it can complicate claims – especially if you have a unique vehicle like a Tesla. When you insure your vehicle with Tesla, you’re insuring your vehicle with a company that knows everything about your vehicle – after all, they made your vehicle.
Better Accident Investigation: Tesla knows how their cars operate. They know how their sensors work, and they know how quickly their vehicles stop or accelerate. Because of this knowledge, Tesla should theoretically be able to investigate accidents more effectively.
Cheaper for Some Drivers: Some drivers save hundreds per year on car insurance by switching to Tesla. Traditional auto insurance providers charge high rates to Tesla drivers. They’re high-value cars with intricate components. They’re expensive to repair and replace. Tesla’s battery, for example, costs $10,0000-$25,000 to replace. For that reason, many Tesla drivers pay $200 to $400 per month for car insurance. With Tesla, many drivers dropped car insurance premiums by 20% to 40% by switching. Some drivers pay just $100 to $150 monthly to insure their Tesla with Tesla’s in-house auto insurance.
Regular Improvements: Elon Musk likes to launch a product quickly and continuously improve on that product. Tesla may be following a similar approach with its insurance. Although there are some growing pains, Tesla should continue to improve its insurance product in the coming months and years.
Cons
Disadvantages of Tesla car insurance include all of the following:
More Expensive for Some Drivers: Some drivers save money by switching to Tesla. Others pay the same premiums – or more expensive premiums – with Tesla.
Difficult to Compare: Tesla’s auto insurance premiums are customized based on driver behavior. This can be a good thing, but it can also be a problem. It makes Tesla auto insurance difficult to compare with other providers.
Lack of Expertise in Claims Handling: Tesla is a new auto insurance provider, which means they have limited experience handling claims or dealing with other insurance company issues. Based on reviews online, Tesla has faced growing pains with certain claims and customer service issues.
Only Available in Some States: Tesla currently only offers in-house car insurance in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia. Elon Musk has indicated plans to expand to other states in the near future, although it’s currently only available in those states.
Lose Bundling Discounts: You might have home insurance, car insurance, and life insurance with a single company. You get a discount on all three policies. Tesla only sells car insurance, which limits the potential of a bundling discount.
Deal with Multiple Insurance Companies: Some customers like dealing with a single insurance company – and a single billing system. Yes, you could save a few dollars by making the switch, but some policyholders are willing to pay a small premium for convenience.
Autopilot Impacts Premiums: Tesla will consider how much you use autopilot when calculating insurance premiums. Tesla trusts its autopilot function more than it trusts you. Drivers who frequently use autopilot can save money, although drivers who rarely use autopilot may be punished.
Can Drivers Save Money with Tesla’s In-House Insurance?
Some drivers save money by switching to Tesla. Other drivers pay more with Tesla auto insurance.
Some drivers cut premiums in half by switching to Tesla. You might drop premiums from $300 to $150 per month by switching to Tesla, for example.
Other drivers saved less money – or paid more money – with Tesla auto insurance. If you’re already paying around $100 to $200 per month for car insurance on your Tesla, then it’s unlikely you’ll save significant money by making the switch.
Overall, Tesla is still determining its car insurance algorithms. The company updates its algorithms and risk analysis regularly. Some drivers will pay more for Tesla auto insurance, while others will save a significant amount of money. Compare quotes today to ensure you’re paying the lowest possible rates on car insurance on your Tesla.
How to Buy Tesla Auto Insurance
Tesla drivers can get a quote within minutes on the Tesla website here: https://www.tesla.com/insurance
Click the ‘Get Insurance’ button and obtain a quote within minutes. You’ll have to download the Tesla Insurance Android or Apple iOS app to use the insurance quote service.
Alternatively, you can contact Tesla’s auto insurance agents by phone or email to get a quote or discuss coverage. Tesla Insurance’s phone number is 1-844-34-TESLA. Their email address is insurance@tesla.com.
Tesla Insurance 3rd-Party Ratings and Reviews
Given Tesla Insurance’s relatively recent entry into the market, finding customer reviews specifically for their insurance services can be challenging. On the Better Business Bureau’s (BBB) website, however, Tesla Insurance holds a 1.1 rating with 318 reviews. Customers often complain about the claim filing process and how long Tesla takes to pay out claims. Tesla received the following other ratings:
Clearsurance: 1.64/5
TrustPilot: 2.3/5
ConsumerAffairs: 3.8/5
Tesla’s car insurance also does not currently hold ratings from reputable third-party agencies such as J.D. Power for customer satisfaction. It has also not been assigned any financial strength ratings by esteemed financial ratings agencies like AM Best and Standard & Poors. This means it’s difficult to tell how well Tesla can pay its claims.
However, State National Insurance Company fronts Tesla’s insurance product. State National has an AM Best score of ‘A’ (excellent). If you were worried about Tesla Insurance’s financial stability, rest assured knowing a financially strong insurance company backs it.
Frequently Asked Questions
Final Word on Tesla Insurance
Tesla understands its vehicles better than traditional insurance companies. They know how quickly a Tesla car stops. They know the likelihood of their autopilot system causing an accident. They know the repair and safety costs of their vehicles. Because of these advantages, Tesla can eliminate much of the guesswork and added fees that traditional insurers charge Tesla drivers.
However, traditional insurance companies are getting smarter about insuring Tesla vehicles. They’re offering lower rates and better claims satisfaction. They offer benefits like bundling discounts that Tesla cannot currently offer.
Overall, Tesla’s in-house car insurance is the right choice for some Tesla drivers but not others. Some drivers save money by making the switch, while others do not. However, it’s worth it for Tesla drivers to request a quote through Tesla’s in-house auto insurance today.
