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Tesla Auto Insurance: What WIll It Cost You?

Tesla vehicles have the highest car insurance premiums in the nation. Although Teslas maintain exceptional safety standards, they have higher repair costs and collision insurance premiums. 

Tesla sells its own brand of commercial car coverage called Tesla Insurance; however, the auto manufacturer's policies aren't the most cost-effective option available in the marketplace. Private insurers, such as USAA, Mercury Insurance and Nationwide, offer auto insurance policies that have cheaper premiums than Tesla's.  

Based on SmartFinancial's research, the average price for Tesla insurance is $2,015.44 per year. Auto insurance premiums for Teslas vary based on the vehicle's model, manufacturer standard retail price and trim.

To lower car insurance costs, shoppers should select lower-priced Tesla models and choose car insurance policies from more affordable auto insurers. 

What Is the Average Cost To Insure a Tesla?

According to SmartFinancial's research, the average Tesla auto insurance premium is $2,015.44 ($167.95 per month). 

Car insurance rates are higher for Teslas because there are fewer repair shops for these vehicles. Mechanics must undergo special training and use expensive equipment to fix Teslas. Additionally, Tesla's replacement parts are higher than regular vehicles, which can also increase repair costs.

Although Teslas maintain exceptional safety standards, they have higher repair costs and collision insurance premiums.

Which Tesla Model Is the Least Expensive to Insure Overall?

Tesla Model

Average Annual Car Insurance Premium

Model Y (2021)

$1,261.80

Model X (2021)

$1,764.00

Model 3 (2022)

$2,046.80

Model S (2002)

$2,994.89

Source: SmartFinancial

The average Tesla auto insurance premium is $2,015.44 ($167.95 per month).

How Much Is it To Insure a Tesla by Age and Model?

Average Annual Premiums by Age Range for Tesla Vehicles

Age Range

Model Y*

Model 3*

Model X*

Model S*

20 - 29 years old

$2,066.52

$1,991.16

$2,479.08

$1,615.20

30-39 years old

$1,770.24

$1,935.12

$1,188.24

$2,420.40

40-49 years old

$891.72

$2,237.52

$1,570.32

$2,446.20

50-59 years old

$1,527.36

$1,996.08

N/A

$3,611.28

60+ years old

$1,349.88

$1,738.20 

N/A

$1,947.12

Source: SmartFinancial.com         *2021 Premiums

When buying a new Tesla, shoppers should consider the Manufacturer's Standard Retail Price (MSRP) which will determine how high car insurance premiums will be.

For instance, Tesla's 2021 Model 3 (Base Trim) may have lower insurance premiums and replacement costs than Tesla's 2021 Model 3 (Performance Trim) because there is a $14,000 price difference between the two vehicles. The starting MSRP for the Model 3 (Base Trim) is $46,190, and the Model 3(Performance Trim) is $60,190.

Why Is Tesla Insurance So Expensive?

There are several reasons why car insurance premiums for Teslas remain high.

  • Tesla insurance costs are higher because these vehicles have expensive premiums for collision coverage.

  • Tesla vehicles have higher maintenance fees and repair costs that surpass other luxury cars.

  • Vehicle owners can only have their Teslas repaired at service centers or body shops approved by Tesla. Additionally, its technicians must undergo continual training and use expensive, special equipment to fix their vehicles, which can increase customers' final repair bills. 

  • On average, electric cars, like Teslas,  have higher repair costs and auto insurance premiums compared to standard vehicles. 

  • Tesla's Models S and X have an all-aluminum construction. This material reduces each vehicle's weight and extends the battery life. Aluminum also performs well during car crashes; however, this material is costly to replace. When a car accident occurs, repair shops must replace the entire aluminum column, unlike steel components which can be reshaped in regular vehicles. 

  • Even a minor car crash in a Tesla can result in expensive repair bills because of high-cost replacement parts. 

See How Much You Could Save On Your EV

Which Insurers Offer the Cheapest Insurance Rates for Teslas?

Average Auto Insurance Rates for Tesla Model 3(2022)

Auto Insurance Company

Average 12-Month Premium 

National General 

$845.00/year

Unitrin

$1,490.00/year

USAA

$1,524.00/year

California Capital

$1,923.00/year

21st Century

$2,022.00/year

Metropolitan

$2,175.00/year

Alliance United

$2,214.00/year

Nationwide

$2,501.00/year

Mercury Insurance

$2,581/year

Average Auto Insurance Premiums for Tesla Model Y (2022)

Auto Insurance Company

Average 12-Month Premium

Mercury Insurance

$1,555.00 / year

Safeco

$1,811.00/ year

Liberty Mutual

$2,402.00/year

SafeAuto

$5,202.00/year

Average Auto Insurance Premiums for Tesla Model S (2021)

Auto Insurance Company

Average 12 Month Premium

Mercury Insurance

$1,655.00/year

Nationwide

$1,995.00/year

Kemper Auto Premium

$2,296.00/year

Dairyland Auto

$2,484.00/year

Safeco

$3,857.00/year

Liberty Mutual

$4,872.00/year

SafeAuto

$9,795.00/year

Average Car Insurance Premiums for Tesla Model X (2021)

Auto Insurance Company

Average 12 Month Premium

California Capital

$1,722.00/year

Direct Auto

$1,979.00/year

Country

$2,121.00/year

SECURA Insurance

$2,256.00/year

Georgia Farm Alliance

$2,426.00/year

Alliance United

$2,502.00/year

21st Century

$2,799.00/year

USAA

$2,830.00/year

Tesla Insurance premiums are higher, on average, than car insurance plans available from national insurers.

Can You Buy Car Insurance Directly From Tesla?

Tesla's car insurance policies are available to Model 3, Model X, Model Y and Model S owners in California, Illinois and Texas. 

Here's what Tesla car insurance policyholders can expect:

  • Tesla-insured vehicles are repaired at its internal service centers instead of body shops. 

  • Tesla insurance offers auto insurance discounts to Tesla vehicles with the auto-pilot feature. This discount lowers the cost of its liability and collision insurance coverage but doesn't apply to uninsured motorist coverage or comprehensive insurance. 

Tesla Car Insurance Coverages

  • Autonomous vehicle owner liability covers bodily injuries and property damage that take place when a Tesla vehicle operates in autonomous vehicle mode (level 2 and higher), up to the same liabilities limits you have when driving.

  • Cyber identity fraud expenses pay for digital identity fraud costs up to $15,000.

  • Wall charge coverage covers up to $3,000 of damages or losses to the electrical power charger Tesla supplies for your vehicle. Wall charge coverage doesn't cover damages caused by negligence.

  • Electronic key replacement pays up to $500 to replace electronic keys Tesla supplied with your vehicle. Owners can only make two claims per period.

How Much Is Tesla Insurance?

Unfortunately, Tesla's cost-reduction strategies haven't lowered its overall car insurance premiums for its customers. Tesla Insurance premiums are still higher, on average, than car insurance plans available from national insurers like USAA, Nationwide and others.

Tesla also offers a usage-based plan for the Tesla Model S, Model 3, Model X and Model Y owners in Illinois and Texas, where Tesla drivers can save between 20% to 40% on their auto insurance premiums, and the safest drivers, between 30% and 60%. 

What Type of Insurance Policy Is Best for a Tesla?

Full coverage insurance is the best auto insurance coverage for Tesla vehicles, since repairs for Teslas can be expensive.

Full coverage car insurance includes liability (bodily injury and property damage), collision, comprehensive and uninsured/underinsured motorist insurance. 

Individuals who lease or finance their Teslas can purchase gap insurance, which is cheapest when purchased with a car insurance policy.  

Get Affordable Coverage for Your Tesla 

Tesla vehicles have the country's most expensive auto insurance premiums. To cut car insurance costs, shoppers should opt for lower-priced Tesla models and select coverage from auto insurance providers who offer affordable premium rates. 

If you're unhappy with your current car insurance, SmartFinancial can help you compare rates in your area to find the cheapest car insurance policy for your Tesla. Enter your zip code below and answer a few questions for a free car insurance quote. You could save up to 40%.

Get a Free Auto Insurance Quote Online Now.