Tesla Auto Insurance Review (2024)

Tesla is a company that inspires enthusiasm and trepidation at the same time.

It produces inventive ideas like auto insurance for Tesla owners but incurs hundreds of millions of dollars worth of losses on occasion as its attempts to expand, putting stress on its revenue streams.

The vision for a world that is not reliant on fossil fuels, one that helps out the environment, is admirable. But Elon Musk sets an example that is tough to match and might put stress on Tesla’s workers’ work-life balances.

Its insurance proposes to cut rates by 20–30 percent compared to other insurers but there is uncertainty as to how it will succeed.

Fortunately, it has a stable underwriting partner in State National. It has an A rating from A.M. Best, meaning it has an excellent chance to meet its ongoing insurance obligations.

Will Tesla Insurance succeed? There’s no way to know for sure. However, if it goes like the other parts of Tesla, it will be an interesting ride.

What You Should Know About Tesla Insurance

Ratings are important. It’s why we have the New York Times Best Seller list, People’s Most Beautiful list, and Navigant Research’s autonomous vehicle companies list.

There is no doubt that Tesla has grown tremendously in the past few years in terms of overall revenue. But that doesn’t necessarily mean the company’s financial outlook is strong.

And if you’re looking to buy insurance from them, you will want to know if it’s a financially strong company.

That’s what we’ve got here — a mix of financial and customer satisfaction ratings. So that you, as a current or potential buyer, know what your peers think of it.

We’re on stretch one. Let’s give it some gas.

Better Business Bureau

The Better Business Bureau (BBB) is an organization that ranks businesses through numerous factors.

The rating methodology for businesses includes resolving customer complaints, any legal action filed against the business, and any advertising issues known.

BBB gives Tesla an A+.

Customers are somewhat mixed about Tesla, giving it a 3.1 out of five stars out of 96 reviews. There were 1,200 complaints closed in the past three years, which is more than GM, Ford, or Toyota.

Moody’s Rating

Moody’s is considered one of the big three financial rating agencies in the United States. It issues credit ratings, economic outlook ratings, and overall financial strength ratings.

Moody’s gives Tesla a B3 rating. What does this mean? According to Moody’s methodology, “obligations rated B are considered speculative and are subject to high credit risk.” A 3 is the lowest sub-rating in the B category.

This B3 rating is for Tesla’s long-term global outlook, based on evaluating credit levels and the amount of revenue coming in. The company is considered stable and not on watch.

S&P Rating

Standard and Poor’s (S&P) is also considered a big three financial rating agency in the United States. Like Moody’s, it issues credit ratings, economic outlook ratings, and overall financial strength ratings.

S&P gives Tesla a B- rating. This means, according to S&P’s methodology, that Tesla is at a higher risk of nonpayment than those with a BB or above.

It can still meet its financial obligations but may have trouble under adverse economic conditions.

The S&P wrote in May, when it upgraded Tesla’s ratings, “The negative outlook reflects risks related to weaker than expected demand, ongoing profitability challenges, and the company’s lack of free cash flow over the next 12-24 months.”

It added that the company’s financial position might be unsustainable due to these factors and Tesla’s rising financial commitments.

Consumer Reports

Consumer Reports (CR) is an organization that allows consumers to rate their satisfaction with a company. It also rates products, such as mattresses, vacuum cleaners, and cars.

CR has not been positive about Tesla’s vehicles. The highest-rated vehicle is the 2019 Model S (78 out of 100), while the lowest is the 2019 Model X (just a 55).

However, despite the low CR ratings for Tesla’s vehicles, Tesla’s customers are satisfied, coming in at the top of all car manufacturers. Its customer satisfaction rating is 89 out of 100.

Consumer Affairs

Consumer Affairs is a bit like CR without product reviews. Instead, it is a site where customers can rate a company and leave reviews.

Consumers had mixed feelings about Tesla, giving it 3.2 out of five stars from 328 reviews. Some of these complaints concerned customer service or the repair process. The purchase process was lauded by some.

Tesla History

Tesla was founded in 2003, in honor of Nikola Tesla, who, along with Edison, was one of the two most impactful inventors of the late 19th century.

Its goal to supply American households with affordable, quality electric cars was simple in theory but difficult in execution.

Still, it attracted investor after investor, with current CEO Elon Musk supplying money each round. Today, the name is synonymous with electric cars and innovation. Flash and glam and great car release nights.

But we know you might care more about a company than its products.

How it treats its employees, what it does in the community, and even its position for the future can all play a role in whether you sign up for them or not. How does Tesla measure up in these regards?

We’re heading into stretch two.

Tesla Market Share

There are two components to Tesla’s market share. The first is the geographic area, such as California, the United States, or global. The second is between the electric vehicle (EV) market and the whole automotive market.

When it comes to the first, Tesla’s market shares are fairly small.

In California, Bloomberg reports that Tesla’s market share for all automobiles is 4.2 percent. In the U.S., that number is around 2 percent, according to Statista.

And while it’s tough to gauge its market share worldwide, The Driven reports that Tesla tripled its market share in Europe in the first half of 2019 from .16 percent to .54 percent.

The reason for the rise is the Model 3 electric sedan, which, when released, became a bestseller in 2018. Due in large part to it, California’s EV market share rose above 5 percent for the first time.

This car has also helped Tesla further dominate the U.S. EV market, with 60 percent of all EV purchases in the first quarter of 2019 being a Tesla 3. That contributed to an overall EV market share of 50 percent.

What does this mean for insurance? As we’ll see, Tesla’s insurance only applies to Tesla owners, meaning that the larger its market share, the more potential customers it has.

Tesla’s Position for the Future

Tesla’s future seems bright and uncertain, a strange mix for a company currently dominating market share in an upcoming industry segment.

While it generates roughly $5 billion in revenue each quarter, it scales up its production often dramatically, causing it to lurch into an uncomfortable financial position.

Moody’s and Standard and Poor’s rate Tesla in the middle tier. This means it has a higher chance of not meeting credit obligations (paying back debt) than other, more highly-rated companies.

Standard and Poor’s actually rated its outlook as negative.

But there’s always the flip side. It dominates an upcoming market segment in electric vehicles, has the brand name to get people’s attention, and soon will be producing vehicles that appeal to middle-class workers.

This should all increase its revenue and market share significantly, especially if taxpayers are continuously rewarded for buying electric vehicles and the market shifts in that direction.

And then there is the insurance angle, which is why we’re here today. Tesla’s insurance is just for Tesla owners, meaning that the more it grows in market share, the more customers it might have.

Tesla’s Online Presence

Tesla has four social media outlets that post videos, images, and more.

• YouTube
• Facebook
• Twitter
• Instagram

Each has hundreds of thousands, if not over a million, followers.

Tesla’s Commercials

Tesla doesn’t have commercials per se, and as of late May had never spent a dime on paid advertising. But it has a YouTube channel, and some features might be classified as commercials.

Let’s look at Tesla’s community involvement.

Tesla in the Community

Corporate stewardship arises from the understanding that a company cannot exist as a separate entity from a community, a neighborhood, a city, a country, or the world.

As such, a company is responsible for acting for the betterment of those communities, whether socially, economically, or through environmental issues.

Tesla does no straight work in the community. Or at least it doesn’t publicize it. Instead, it focuses on stewardship with a particular angle that aligns with its products and mission.

That is environmental stewardship, improving the quality of our energy sources and reducing our dependence on fuels that harm the environment.

To this end, its work in places like Samoa and Europe aims to reduce dependence on fossil fuels and create energy that relies on natural sources or those that reduce overall energy consumption.

Tesla’s Employees

We know commercials and corporate stewardship are important, but another part is also. How Tesla treats its employees can be seen as a reflection of the company’s priorities.

So what do employees think about it, and are there any awards that Tesla has won for company culture?

We looked at Forbes for the latter. Tesla has won awards for diversity, the inclusion of women, and a launching pad for new graduates.

Tesla Awards

Its employees are not necessarily positive about Tesla, though its ratings on Indeed are similar to those from major insurance companies like Allstate and Farmers.

Their qualms, including a brutal work schedule and some insecurity about their jobs, have been covered in detail by some outlets. On the other end of the ratings are the pay and benefits, the top-rated category.

Tesla Indeed Details

Reviewers on PayScale noted that the job is highly stressful, which may align with the work hours and insecurity of their jobs. Job satisfaction is good, however.

Tesla Payscale Details

Reviewers on Glassdoor are slightly less positive about Tesla than on Indeed and PayScale. Just about half would recommend Tesla to a friend, though 65 percent approve of Elon Musk.

Tesla Glassdoor Details

Generally, it’s a mixed bag, with workers reporting high-stress levels and a poor work-life balance but also high pay and good benefits. It also has average to good overall ratings.

Tesla is one of the rare companies where people might buy into the culture and the mission to an unusual extent, working more hours as a result.

Combine that with Elon Musk’s ethos and example as a CEO, and it may come as no surprise that there is a mixed bag of ratings and reviews, as employees have differing views.

To many, Tesla is controversial. That extends to its company culture and the demands it may place on employees.

Canceling Your Policy with Tesla

There is no information available about how to cancel a Tesla insurance policy. However, some general guidelines help a cancellation process go smoothly.

• First, a prorated refund is generally if the customer cancels before their policy is up.
• Second, cancellation fees can vary. Often it depends if you’re canceling well before your policy is supposed to end.

There are a couple of problem areas to watch out for.

Don’t cancel your policy before having another in place. If you cancel without having another in place, your DMV might ask you to surrender your plates and tags.

Don’t just stop paying your policy and hope it will be canceled. If you do so, you might be charged for the grace period. Or, even worse, you’ll continue to be charged for the overall policy.

Each company has its own steps to cancel. Often, you need to talk to your agent first. The company usually needs your termination request in writing.

Finally, have a specific cancellation date in mind. Ensure your new and old policies overlap by at least a couple of days.

Generally, you can cancel your policy anytime.

How to Make a Claim with Tesla

If you’re in an accident or have another accident, the last thing you want is to have a stressful claims experience.

Tesla writes on its website, “To report or track a claim on an existing Tesla Insurance policy, call the number on your insurance card, which is available to download through your Tesla Account. An assigned claims specialist will support you through your entire claims experience.”

Even further, Tesla will pair you with Tesla Body Repair Centers where available, “which offer a quicker assessment and direct interaction with a specialized adjustor.”

Tesla: How to Get a Quote Online

So, you’ve decided you’re interested in Tesla auto insurance quotes. There are a couple of options.

• You can log in and get a quote online if you have an account.
• If you don’t have an account, call 1-844-34-TESLA (1-844-348-3772).

Tesla doesn’t have in-person agents or physical agencies, so you’ll deal directly with the company.

Easy enough, right? But most importantly, you will want to compare rates, so you know you’re getting the best auto insurance rates.

Entering your info on multiple company websites is time-consuming, but we make it easy.

Design of Website & App

We know there might be nothing more frustrating than trying to find answers through a company’s website if that site is confusing and poorly designed.

In this section, we look at Tesla’s website and app to see if they’re user-friendly. And if they have all the functionality, you would assume of a technology company.

Tesla Insurance Coverage Options

It is unknown which coverages Tesla will offer, as it has none listed on its website. However, there are some typical coverages that companies offer.

Six are personal auto coverages.

Types of Personal Auto Coverages

Two are vehicle coverages.

Types of Vehicle Coverages

And this special auto coverage is specifically mentioned on the website in the FAQ section of Tesla’s website.

Types of Special Auto Insurance Coverages

The guess is that Tesla will roll out a complete auto insurance plan, with enough coverage to compete with other companies in California.

Tesla Insurance Rates Breakdown

Tesla started offering auto insurance on August 28th, revealing the insurance with a blog post on its website. It mentioned several points, including who would be included, in what states, and more.

• Tesla Insurance would be for Tesla owners only.
• It would be available solely in California.
• It would be 20 to 30 percent cheaper than getting insurance through other insurers.

Average Tesla Male vs. Female Car Insurance Rates

California does not allow insurance companies to set rates based on gender. Other states are following suit.

Average Tesla Coverage Level Rates

Auto insurance coverage levels can range for numerous reasons.

The first is the number of coverages you have. Your coverage level is higher if you have liability on top of comprehensive and collision.

The second is the limits on your coverage. For instance, your coverage levels will be higher if you have a $50,000 bodily liability limit versus a $30,000 bodily liability limit.

It is unknown what coverage limits Tesla will offer, but it will at least be 15/30/5. Those are the minimum liability auto insurance coverages required in California.

• $15,000 for bodily injury or death per person
• $30,000 for total bodily injury or death per accident
• $5,000 for property damage per accident

Savings for Tesla Insurance range from $490–$1,060.

Average Annual Auto Insurance Rates for Tesla Compared to Average Company Rates by Coverage Level

This is based on its 20 percent discount.

What is the average cost of Tesla insurance by model?

The Tesla Model 3 averages the least cost at under $2,000, with the Model S averaging over $3,000.

Tesla Insurance Discounts Available

Discounts are also a bit of an unknown. However, there are four that Tesla mentions in its FAQ section. Three are demographic- or policy-oriented.

Tesla Personal Auto/Policy Discounts

The last is a particular focus of Tesla and a key selling point regarding its insurance.

Tesla Vehicle Discounts

One discount Tesla has made clear it won’t have, at least initially, is telematics. This is fairly common with other insurance carriers and involves installing an app that monitors driving.

Tesla doesn’t have this now but indicates it might in the future.

Tesla’s Programs

There doesn’t appear to be a special program for its own insurance. However, it once had a program through a partnership with Liberty Mutual.

It was called InsureMyTelsa and was supposed to lower rates for Tesla drivers, who had high rates even compared to other luxury car owners.

Currently, there’s no evidence of that program on Tesla’s website. It appears it might have been shelved, as customers complained of high rates, and Tesla decided to roll out its own insurance program.