What Are Tesla Insurance Rates in 2023?

October 01, 2023
EV Universe
EV Universe

Tesla has been thought of as one of the most expensive car brands that you can get. Prices for Teslas have dropped substantially over the last year and in some instances are less than their gas counterparts.  However, car owners and car enthusiasts know that buying a car is not all that costs money. Once you have a car, you need to spend a lot to maintain it and insure it.


With respect to insurance rates, Tesla is substantially more expensive than other popular brands due to the high repair rates. These rates can vary based on your insurance company, the Tesla model you own, your driving history, and the amount of coverage you choose.


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In this article, we will discuss the insurance rates for Tesla in 2023, model by model.


How Much is Tesla Insurance?

The average cost to insure the Tesla Model 3 is $2,503, which is the cheapest model to insure. Tesla Model Y costs around $2,599 a year while Model X and Model S costs more to insure. Model X insures at around $3,759 and Model S costs about $4,318.


If you can pay the insurance bills in monthly installments, it will cost you:


  • Model 3: $209
  • Model Y: $217
  • Model X: $313
  • Model S: $360


It’s important to note that the median annual rates for full insurance coverage range dramatically from state to state.


For model 3, Maine has the lowest median Tesla insurance cost i.e. $1,697. On the other hand, Louisiana has the highest median Tesla insurance cost i.e. $4,820.


Comparing insurance rates from company to company can help you save around $500 to $2,600 per year. However, many other factors also come into play, so try to keep a high safety score, avoid speeding tickets, and maintain a clean driving history to get a better insurance rate.


Why Does Tesla Insurance Cost More?

Insuring your Tesla can cost you more as compared to other cars. The reason is that these cars are produced using expensive materials and tech which means that it will cost more to repair them.


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  • Higher Price Tag: It’s no surprise that Tesla vehicles are more expensive as compared to many car brands, especially the Model X and S. If you get in a serious accident, it will cost more to replace or repair the required parts.
  • Requirement of Expertise: You need a good mechanic to repair or replace the broken parts of a Tesla. Not everybody can fix these cars. Insurance companies need to find expert mechanics with intimate knowledge to repair the tech outfitted on your Tesla. The repairs may also require some time so time value plays a significant role.
  • Electric Car Parts: Electric car parts are not easy to come by nor do they come cheap. Batteries can cost thousands of dollars. However, Tesla’s warranty offers the batteries of all four models for up to 8 years. These batteries have a life expectancy of around 200,000 miles in the United States.
  • Safety Ratings: According to the Insurance Institute for Highway Safety (IIHS), Tesla Model 3 was the Top Safety Pick for 2021. Top safety ratings temper with the insurance rates as well.


What Company Offers The Cheapest Tesla Car Insurance?

Insurance rates vary from company to company. If you are looking for the best Tesla car insurance rates, then check out State Farm. Let’s go through some of the companies that offer the cheapest insurance rates for Tesla.


Company Median Annual Rate
State Farm $2,033
Travelers $2,083
Nationwide $2,496
American Family $2,619
Progressive $3,130


Apart from these companies, another company costs even less than State Farm. USAA has a Tesla insurance rate of around $1,404. However, they offer these rates only to military members, veterans, and their families.


Liberty Mutual is almost one of the most widely known insurers in the country but there is not enough publicly available information regarding their insurance rates, which is why we are not including them in this list.


Before settling on an insurance company, do check out the smaller, regional insurance companies.


What is Tesla Insurance?

In 2019, Tesla introduced its own car insurance option to shoulder the financial burden that Tesla owners were facing when insuring their electric vehicles. The company claims that it can help owners save around 20% as compared to other insurers.


Tesla insurance is available for all existing and new Tesla owners to insure both their Tesla and non-Tesla vehicles. If you live in California, you have the added benefit of being able to get Tesla insurance without even owning a Tesla.


Moreover, Tesla itself estimates that drivers save between 20% and 40% with Tesla Insurance. The safest drivers could see savings of 30% to 60%.


tesla model x interior lower


You can access this insurance in the following 12 states:


  • Arizona
  • California
  • Colorado
  • Illinois
  • Maryland
  • Minnesota
  • Nevada
  • Ohio
  • Oregon
  • Texas
  • Utah
  • Virginia


The typical Tesla insurance rate is $2,030 per year across all Tesla models, which is about 49% less than the average rate. If you are a Tesla driver with high safety scores, you can save even more.


How Does Tesla Insurance Work?

Instead of using the typical factors to set a car insurance rate, Tesla uses real-time driving behavior to determine the cost. Tesla collects data on your driving practices and habits through your Tesla car without using an additional application or a plug-in device.


What they note in your driving behavior includes:


  • Number of forward-collision warnings
  • Hard braking
  • Excessive speeding
  • How close you are to the car in front of you
  • How often you drive late at night


Judging by these factors, Tesla gives you a score ranging from 0 to 100. A higher score indicates that your driving habits are on the safer side of the spectrum. Thus, an ideal score of 100 can lead you to save 37% off the base rate, i.e., you will get an annual rate of only $887 on a new Model 3, which is shockingly low when compared with an average of $3,386 per year.


Tesla sets insurance rates according to five-point Safety Score increments. In case your average score falls somewhere between 95 and 99, your insurance rate will increase to $1,040 per year. So try to keep your safety score higher to get the minimum insurance rate.


tesla emblem white bg evu


It’s important to keep in mind that your safety score is always being updated based on the practices you follow.


If you are a new policy owner, you will receive a safety score of 90. In case you are getting insurance for a non-Tesla car or a car that doesn’t have the ability to collect or report data, you will be given a safety score of 86.


What makes Tesla insurance stand out amongst the rest of the companies is that they don’t consider a lot of factors that they do when setting car insurance rates, such as:


  • Accident history
  • Age
  • Gender
  • Marital status
  • Tickets (for example: speeding)
  • Credit
  • Claims


Instead, they use the following factors to determine your insurance rate:


  • Your vehicle’s Safety Score
  • Miles driven
  • Where you live
  • Vehicle make and model
  • Coverage purchased
  • Number of vehicles insured


How To Compare Car Insurance For a Tesla?


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There are some considerations that you need to keep in mind when choosing a car insurance company for a Tesla. Here are some of the factors:


  • Cost: The insurance rates vary from company to company. Major brands charge higher prices for insurance, so it’s best to get quotes from multiple companies, including regional brands. Consider opting for Tesla’s own insurance to get access to certain perks and special discounts.
  • Coverage: There are multiple areas where you can get coverage for your Tesla. If you are not satisfied with the minimum coverage, look into expanding the protection through collision, comprehensive, or liability insurance.
  • Discounts: Discounts don’t hurt anyone, so don’t shy away from companies that are offering discounts on insurance rates.
  • Special Features: Insurers like Chubb or Pure can give you access to luxury features such as agreed-value coverage, high liability limits, and original parts coverage.



1. Are Tesla cars expensive to insure?

Yes they can be, Tesla cars can be expensive to insure. The Tesla Model 3 is the cheapest car to insure among the 4 models. When compared with the insurance rates of other cars, Tesla cars can cost around 45% more than the median national cost of car insurance.


2. What insurance coverage does Tesla offer?

Tesla offers:


  • Liability insurance
  • Collision insurance
  • Comprehensive insurance
  • Gap insurance
  • Roadside assistance
  • Coverage for damaged glass
  • Other optional coverage types such as autonomous vehicle owner liability, electronic key replacement, wall charger coverage, and cyber identity fraud expenses


3. Can I get Tesla insurance if I don’t own a Tesla vehicle?

You can get Tesla insurance if you don’t own a Tesla vehicle only in the state of California. Otherwise, you are not eligible to get Tesla insurance.

Image Credits: Provided by Tesla, Inc.


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