Should You Get Auto Insurance From Tesla?

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Tesla sells its own auto insurance in a handful of states. Here’s what you need to know about it. 

Teslas are appealing options for environmentally-conscious drivers and those who like to keep up with the latest tech, but they have a big drawback: those insurance premiums. The cars contain a lot of rare components that are costly to replace, and there aren’t a lot of repair shops that know how to do the work.

Some traditional insurance companies charge Tesla owners an arm and a leg for coverage, so the idea of getting a more affordable policy from Tesla itself seems like an easy call. But there’s more than just price to think about. Here’s what drivers should know before purchasing an auto insurance policy from Tesla.

Who can get a Tesla auto insurance policy?

First things first, not everyone is eligible to get a Tesla auto insurance policy. Drivers need to have at least one Tesla vehicle in order to purchase a policy from the company. Those who have non-Tesla vehicles have the option to add these as well.

Drivers will also need to live in one of the following states to get a Tesla policy:

ArizonaCaliforniaColoradoIllinoisMarylandMinnesotaNevadaOhioOregonTexasUtahVirginia

Drivers in other states will have to look elsewhere for now. But it’s possible that Tesla will expand its offerings in the future.

How does Tesla auto insurance work?

Tesla auto insurance offers usage-based auto insurance. It assigns drivers a Safety Score, which determines their premium rate. Several factors influence this Safety Score, including:

Number of Forward Collision Warnings (FCW) when not on AutopilotHow quickly a driver brakesHow sharply a driver turnsHow closely a driver follows other vehiclesHow fast a driver drivesThe time of day a driver uses their vehicleNumber of Forcible Autopilot DisengagementsHow often the driver doesn’t wear their seatbelt

Many insurers these days offer similar programs, but they usually require drivers to voluntarily install a device in their vehicle to track their driving behaviors. Tesla uses features already built into its vehicles to do this.

California drivers should note that usage-based insurance is not available in their state. Tesla will base these drivers’ rates solely on traditional factors, like where the driver lives and what their accident history is.

Is Tesla auto insurance worth it?

Tesla auto insurance hasn’t been around that long and that, along with its limited audience, explains why the company has yet to feature in any large-scale customer satisfaction survey. But there are plenty of customer reviews online and many are not favorable.

Most customers seem to agree that Tesla auto insurance is affordable — or at least it starts out that way. Many have argued that they’ve had their Safety Score unfairly penalized due to issues like a car pulling out in front of them suddenly, forcing them to slam on their brakes, or driving along a narrow street close to parked cars. They’ve found tracking their Safety Score and the premium increases that result from every infraction to be pretty stressful.

Many have also complained about the insurer’s customer service. Some have said that the company was very helpful and attentive when they were attempting to purchase a policy. But when they needed to file a claim, they faced phone hold times of at least 50 minutes and had a lot of issues getting their claims resolved.

This doesn’t mean that every driver experiences this, but as several customers have raised these complaints, it’s not something to brush off either. Those interested in possibly getting a Tesla auto insurance policy should weigh these factors carefully, in addition to the base rate the company offers them, when deciding if it’s the best choice.

As always, it’s a good idea to get quotes from multiple car insurance companies before settling on a provider. Every company evaluates risk differently and offers a different claims experience, and every driver has different priorities. Having a few options to compare can make it easier to identify which company best fits the driver’s unique needs.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Kailey Hagen has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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