Key Takeaways
- Our team gave Tesla Insurance only 7.7 out of 10 stars due to its limited availability, poor industry reputation and relatively high premiums.
- The average cost to insure a 2021 Tesla model with full coverage is $4,098 annually or $352 per month, which is 53% higher than the national average.
- Many Tesla owners choose to purchase third-party protection for their Teslas rather than opting for the company’s own coverage.
Tesla Insurance, the electric vehicle (EV) manufacturer’s in-house option for auto coverage, is a newer product that’s just starting to gain traction. We at the MarketWatch Guides team wanted to learn whether Tesla Insurance can stack up to the industry’s best car insurance providers, so we took an in-depth look at the company’s policies.
While Tesla’s market share has shown a decline over the past couple years, it is still the top-selling EV brand, according to Kelley Blue Book with 304,451 sales in the first half of 2024, making up 50.8% of the market share. Ford comes in second place at 7.4% of the market share in the first half of 2024
Our team compared the availability, coverage options, costs and customer service scores of Tesla Insurance to determine how it ranks versus leading car insurance brands. We found that drivers aren’t always satisfied with Tesla Insurance due to its relatively poor customer service standards and pricey plans for car coverage.
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How Much Does Tesla Insurance Cost?
Full-coverage car insurance for 2021 Tesla vehicles costs an average of $4,098 per year or $352 each month. This makes Tesla auto insurance premiums approximately 53% pricier than for the average vehicle with a full-coverage policy.
You’ll pay an average of $3,664 annually or $305 per month for full coverage on a 2021 Tesla Model 3, which is 33% higher than the average across all car models. On the other hand, the cost of car insurance for a 2021 Tesla Model Y is $3,426 per year or $286 each month.
Note that full-coverage car insurance includes state-required minimum liability insurance along with comprehensive and collision insurance.
Cheapest Insurance for Tesla
Tesla Insurance isn’t your only option for car coverage, and some traditional insurance providers may offer more reasonable rates for coverage. Note that insurance rates from other companies will be impacted by your age, gender, credit score and other factors left out by Tesla.
Cheapest Insurance for Tesla Model 3
Among the providers in our study, the average estimate for third-party insurance on a 2021 Tesla Model 3 is $3,664 per year or $305 each month.
| Auto Insurance Company | 2021 Model Monthly Estimate | 2021 Model Annual Estimate |
|---|---|---|
| Travelers | $187 | $2,252 |
| Auto-Owners Insurance | $199 | $2,393 |
| USAA* | $204 | $2,456 |
| Nationwide | $206 | $2,472 |
| Erie Insurance | $259 | $3,111 |
| State Farm | $263 | $3,165 |
| Geico | $284 | $3,419 |
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Cheapest Insurance for Tesla Model X
The cheapest car insurance rates for a Tesla Model X start at $2,925 per year from Auto-Owners to $3,988 annually from Progressive. Typically, Model X cars are more expensive to insure compared to the Model 3 and Y.
| Auto Insurance Company | 2021 Model Monthly Estimate | 2021 Model Annual Estimate |
|---|---|---|
| Auto-Owners Insurance | $244 | $2,925 |
| USAA | $256 | $3,073 |
| Travelers | $271 | $3,252 |
| State Farm | $297 | $3,567 |
| Erie Insurance | $329 | $3,949 |
| Nationwide | $332 | $3,988 |
| Progressive | $332 | $3,988 |
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Cheapest Insurance for Tesla Model Y
The average third-party provider estimate for full coverage on a 2021 Tesla Model Y is $3,426 per year, or $286 per month. Auto-Owners offers the cheapest average rate estimates for the 2021 Model Y at $170 per month.
| Auto Insurance Company | 2021 Model Monthly Estimate | 2021 Model Annual Estimate |
|---|---|---|
| Auto-Owners Insurance | $170 | $2,043 |
| USAA | $182 | $2,187 |
| Nationwide | $184 | $2,217 |
| Country Financial | $187 | $2,252 |
| Erie Insurance | $234 | $2,814 |
| State Farm | $252 | $3,029 |
| Geico | $257 | $3,089 |
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Cheapest Insurance for Tesla Model S
The cheapest car insurance for a Model S is offered by Travelers at $3,181 annually or $265 per month with rates climbing to $7,695 annually or $641 per month.
| Auto Insurance Company | 2021 Model Monthly Estimate | 2021 Model Annual Estimate |
|---|---|---|
| Travelers | $265 | $3,181 |
| USAA* | $317 | $3,798 |
| State Farm | $301 | $3,617 |
| Progressive | $377 | $4,518 |
| Farmers | $464 | $5,562 |
| Geico | $473 | $5,674 |
| Allstate | $641 | $7,695 |
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Tesla Insurance Cost by State
Ohio, Vermont and Maine often have the lowest Tesla car insurance costs. Meanwhile, Tesla owners usually pay the most in Michigan, Louisiana, Massachusetts and New York.
State laws along with factors such as claim rates and severe weather probability can affect the cost of insuring a Tesla. Below are the state averages we received for insuring Tesla Models 3, S, X and Y.
All estimates are for full-coverage insurance and are based on the standardized profile of a 35-year-old driver with a clean driving record and good credit history.
| State | 2021 Tesla Model 3 | 2021 Tesla Model S | 2021 Tesla Model X | 2021 Tesla Model Y |
|---|---|---|---|---|
| Alabama | $3,002 | $3,967 | $3,635 | $2,886 |
| Alaska | $3,563 | $5,078 | $4,378 | $3,077 |
| Arizona | $4,438 | $5,730 | $5,222 | $4,297 |
| Arkansas | $3,401 | $4,475 | $4,213 | $3,204 |
| California | $3,813 | $5,457 | $5,223 | $3,862 |
| Colorado | $3,620 | $4,930 | $4,366 | $3,345 |
| Connecticut | $5,155 | $6,582 | $6,361 | $4,458 |
| Delaware | $5,051 | $6,251 | $6,134 | $4,283 |
| District of Columbia | $3,679 | $5,095 | $5,165 | $3,600 |
| Florida | $4,737 | $5,688 | $5,773 | $4,906 |
| Georgia | $3,400 | $4,492 | $4,025 | $3,349 |
| Hawaii | $2,188 | $2,578 | $2,405 | $1,862 |
| Idaho | $2,233 | $3,007 | $2,737 | $1,946 |
| Illinois | $3,987 | $5,405 | $5,079 | $3,884 |
| Indiana | $2,695 | $3,572 | $3,274 | $2,493 |
| Iowa | $2,799 | $3,893 | $3,890 | $2,659 |
| Kansas | $3,863 | $4,686 | $4,654 | $3,536 |
| Kentucky | $3,694 | $4,843 | $4,688 | $3,655 |
| Louisiana | $6,674 | $7,484 | $7,447 | $6,105 |
| Maine | $1,955 | $2,979 | $2,573 | $1,860 |
| Maryland | $3,703 | $4,826 | $4,841 | $3,566 |
| Massachusetts | $3,890 | $5,335 | $5,254 | $3,661 |
| Michigan | $6,683 | $8,451 | $8,285 | $5,718 |
| Minnesota | $3,160 | $4,590 | $4,234 | $2,988 |
| Mississippi | $3,297 | $4,473 | $4,263 | $3,245 |
| Missouri | $3,345 | $4,848 | $4,508 | $3,421 |
| Montana | $4,046 | $4,826 | $4,445 | $3,606 |
| Nebraska | $2,787 | $4,104 | $3,806 | $2,622 |
| New Hampshire | $2,430 | $3,427 | $3,335 | $2,236 |
| North Carolina | $2,731 | $3,244 | $3,262 | $2,480 |
| North Dakota | $2,891 | $4,050 | $3,557 | $2,657 |
| Nevada | $5,415 | $6,557 | $6,196 | $5,252 |
| New Jersey | $4,453 | $5,487 | $5,012 | $3,464 |
| New Mexico | $3,593 | $4,901 | $4,277 | $3,258 |
| New York | $7,140 | $10,027 | $8,926 | $6,528 |
| Ohio | $2,145 | $2,939 | $2,978 | $2,150 |
| Oklahoma | $3,633 | $5,310 | $4,575 | $3,550 |
| Oregon | $3,073 | $4,172 | $3,490 | $2,903 |
| Pennsylvania | $5,574 | $6,404 | $6,771 | $5,326 |
| Rhode Island | $4,144 | $5,721 | $5,754 | $3,954 |
| South Carolina | $2,937 | $3,744 | $3,593 | $2,835 |
| South Dakota | $3,366 | $4,639 | $4,403 | $3,077 |
| Tennessee | $3,642 | $5,171 | $4,929 | $3,420 |
| Texas | $3,966 | $4,976 | $4,677 | $3,906 |
| Utah | $3,643 | $4,259 | $3,767 | $3,255 |
| Vermont | $1,791 | $2,747 | $2,411 | $1,684 |
| Virginia | $2,903 | $3,658 | $3,060 | $2,687 |
| Washington | $2,839 | $3,832 | $3,544 | $2,840 |
| West Virginia | $3,222 | $4,774 | $3,923 | $2,985 |
| Wisconsin | $3,041 | $3,989 | $3,867 | $2,869 |
| Wyoming | $2,944 | $4,130 | $4,280 | $2,828 |
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Tesla Insurance Reviews
The MarketWatch Guides team gave Tesla Insurance sold by the automaker itself 7.7 out of 10 stars due to its lack of nationwide availability, poor customer experience ratings and issues with its reputation.
The company’s approach to auto insurance may not be for everyone. Those who value personal customer service may find it difficult to navigate the company’s digital-first structure.
Overall, Tesla Insurance is worth a look for owners who’ve enjoyed services from the company so far. For most other drivers, however, it’s unlikely to be their best car insurance option.
| Overall Rating | 7.7 |
|---|---|
| Cost and Discounts | 7.8 |
| Coverage | 8.1 |
| Industry Standing | 7.3 |
| Availability | 6.8 |
| Customer Experience | 7.6 |
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Below are the pros and cons of Tesla Insurance coverage:
Pros
Telematics insurance program rewards drivers for good habitsCan be cheaper for some Tesla ownersIntegrates well with the Tesla app
Cons
Only available in 11 statesExpensive for non-Tesla vehiclesReports of poor customer service
MARKETWATCH GUIDES TIP
Since Tesla Insurance hasn’t been around for long, it’s difficult to find customer reviews for it. Tesla is a much larger company, so it’s possible to look at overall reviews to understand how it treats its customers.
Tesla Insurance Customer Reviews
The Better Business Bureau (BBB), which scores companies on how they respond to customer complaints, doesn’t rate Tesla and has withheld accreditation. Customers on the BBB site give Tesla 1 out of 5 stars and it has a high number of complaints, even considering its size.
Tesla App Reviews
We noticed a few patterns in reviews of the Tesla app regarding customer service. People who reported a positive experience with the company mention its technology and the app’s user-friendliness, while negative reviews focus on frustrations with representatives when filing insurance claims.
Our team reached out to Tesla for comment on its negative reviews and issues with its reputation but never received a response.
Tesla Car Insurance Coverage
When it comes to coverage types, Tesla Insurance is a standard auto insurance provider. You can choose either a minimum-coverage plan that just meets your state’s requirements or opt for a wide range of insurance products to protect your Tesla.
Tesla Standard Coverage Types
Below is a list of standard options offered by most car insurers, including Tesla:
- Bodily injury liability insurance: The medical expenses and lost wages of other parties will be covered if they get injured in a car accident you caused
- Property damage liability coverage: Pays for damages to others’ vehicles and property after you cause an accident
- Personal injury protection (PIP): Covers medical bills and lost wages for you and members of your party, regardless of who caused the collision
- Medical payments (MedPay): Takes care of medical expenses but not lost wages for you and your party, no matter who’s found at fault for an accident
- Uninsured motorist coverage/underinsured motorist coverage: Pays for your injury and property claims if an at-fault driver lacks sufficient coverage to pay for damages
Tesla Full-Coverage Insurance
When shopping around, you’ll likely hear people mentioning full-coverage car insurance. This refers to policies that include collision and comprehensive insurance along with state-mandated minimum-liability coverage. Here’s what these types of car insurance take care of:
- Collision coverage: Covers damages to your own vehicle and personal property after a car accident.
- Comprehensive coverage: Covers vehicle damages from sources other than car accidents such as fires, flooding and instances of theft or vandalism.
Tesla Additional Coverage Options
Tesla Insurance offers a few additional coverages that can help you cover expenses related to your vehicle. Although we found these choices commonly mentioned by Tesla owners in our research of customer feedback, there’s no information online about the programs.
- Glass coverage: Covers the cost of repairing or replacing the glass in your Tesla.
- Roadside assistance: Takes care of emergency roadside needs such as towing, fuel delivery and flat-tire help on top of standard insurance services.
- Rental car reimbursem*nt: Pays for a rental car if your Tesla is involved in an accident or heads to the repair shop.
- Gap insurance: Covers the difference between what you owe on a vehicle and what it’s worth in the event of a total loss.
Tesla Insurance Discounts
Tesla Insurance lists a single opportunity to save money on its website: a 12% discount for insuring more than one vehicle on your policy. There are mentions online of an Autopilot discount that reduces rates if you own a Tesla with a strong autonomous driving capacity.
While these were the only Tesla Insurance discounts mentioned, it’s worth reaching out to an agent to check that there aren’t other savings. Many insurers give car insurance discounts for clean driving histories and for having certain safety features in your vehicle.
How Tesla’s App Calculates Car Insurance Rates
Tesla calculates policyholders’ auto insurance rates by evaluating their driving behaviors using technology that comes standard in its cars. Because of this, your responsibility behind the wheel plays a significant role in the prices you’ll be charged for coverage.
Driving behaviors to avoid include hard stops, speeding and using your phone while driving. Each month, the Tesla app issues a safety score (called the Safety ScoreBeta) that will affect your rate for the following month. While Tesla Insurance pitched this as a revolutionary way to set rates, it’s more or less a typical telematics insurance program.
Where Is Tesla Insurance Available?
Tesla Insurance is one of the market’s newest providers, with Tesla CEO Elon Musk only announcing the program in 2019. Availability is currently limited, as drivers in only 11 states can pick up coverage. Here’s where Tesla Insurance is available as of July 2024:
- Arizona
- Colorado
- Illinois
- Maryland
- Minnesota
- Nevada
- Ohio
- Oregon
- Texas
- Utah
- Virginia
Tesla offers car insurance in California but doesn’t base the rates on driver performance in the Safety ScoreBeta program.
Why Is Tesla Insurance So Expensive?
Tesla personalizes car insurance rates based on an individual’s driving habits using real-time monitoring. The Safety Score program extends lower rates to drivers who practice good habits but will also penalize motorists with bad ones.
Tesla says it doesn’t use factors such as your age, gender, credit score and marital status when setting rates. This is different from most providers and may appeal to certain drivers. Instead, the company employs an unusual method, setting insurance rates based on the factors below:
Tesla model: More affordable cars like the Tesla Model Y are often cheaper to insure than higher-end ones like the Model X.
Location: Rates vary based on the state you live in, but they could also change within your state due to the presence and severity of risk factors.
Miles driven: Those who put large numbers of miles on their vehicles will likely end up paying steeper rates for Tesla Insurance.
Deductible: Drivers who choose a low insurance deductible will pay higher monthly rates for car insurance. They’ll be charged less upfront for auto repairs, though.
Chosen coverage: Those who select more extensive coverage or have high limits on their Tesla Insurance plans will likely be charged more. They’ll receive greater benefits if they have to file an auto claim, though, so it’s worth it for many Tesla drivers.
Safety score: There are five main components to the safety score calculated by Tesla. These factors are the number of forward collision warnings you receive per 1,000 miles, how many times Tesla’s Autopilot system has to be disengaged and the number of times you exhibit hard braking, aggressive turning and unsafe following.
Monthly premiums could change with any coverage provider, but they’re particularly variable with Tesla Insurance.
Best Cheap Tesla Car Insurance Rates: The Bottom Line
Owners may find cheaper rates from Tesla Insurance than from other providers, but that isn’t guaranteed. That said, people who enjoy the Tesla ecosystem will likely enjoy the experience offered through the company’s insurance program.
Best Car Insurance for Tesla
Tesla may be the best auto insurance provider for some, but even those people can benefit from shopping around. It’s a good idea to compare car insurance quotes from companies like State Farm and Geico to learn which offers the best coverage at competitive rates.
Two providers that are highly rated for Tesla vehicles are Geico and State Farm.
State Farm: Best Customer Experience
State Farm is the nation’s largest car insurer and offers courage for Tesla vehicles nationwide. It earned the second-best score in our 2024 auto insurance study, far exceeding the placement of Tesla Insurance.
Our team found that State Farm has an outstanding combination of coverage options, reasonable rates and strong customer service. State Farm also features one of the largest selections of discounts in the auto insurance industry, making coverage even more affordable.
Keep reading: State Farm Insurance Review
Geico: Best for Budget-Conscious Drivers
Geico earned a strong score in our 2024 auto insurance study because it frequently provides low average rates. On top of this, Geico offers plenty of discounts such as for good drivers, students and those who bundle homeowners and renters insurance with auto coverage.
Keep reading: Geico Insurance Review
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Tesla Car Insurance: FAQ
Below are some frequently asked questions about Tesla’s own insurance policies:
Insurance on a Tesla tends to be more expensive than for most other vehicles. That’s because the company’s models are involved in a higher-than-average number of accidents and are pricey to repair or replace.
Tesla could be a good car insurance choice for some people. The company claims to offer competitive rates for its own cars, which appears to be true for some drivers. Fans of the brand’s software and tech-based approach will likely appreciate their insurance plan being integrated into the Tesla app.
Currently, auto insurance tends to be cheaper for gas-powered vehicles than for electric cars. This is because components such as the battery and the wall charger are still rare compared to the parts needed to fix gas-powered vehicles.
Insurance for a Tesla Model 3 is pricey compared to insurance for the average vehicle of its size. In general, Tesla models tend to be involved in more accidents than the typical car and have pretty steep repair costs.
A report from the Highway Loss Data Institute (HLDI) concluded that Tesla owners were more likely than the average driver to get into an accident. Another HLDI study found that Tesla models are significantly more expensive to repair after collision and comprehensive claims.
While Tesla Insurance is clearly designed with coverage for Tesla vehicles in mind, owners can insure their non-Tesla vehicles by adding those cars to existing plans.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Cost and Discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities are both taken into consideration.
- Industry Standing (20% of total score): Our research team considers market share, ratings from industry experts and years in business when giving this score.
- Customer Experience (15% of total score): This score is based on volume of complaints reported by the National Association of Insurance Commissioners (NAIC) and customer satisfaction ratings reported by J.D. Power. We also consider the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
- Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements score highest in this category.
Our credentials:
- 800 hours researched
- 130+ companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have feedback or questions about this article, please email the MarketWatch Guides team at [email protected].
