Car Insurance

How Much Does It Cost to Insure A Tesla? Why Do the Costs Differ Drastically?

By TheCarzingTeam July 14, 2019 | Car Insurance

Car Insurance

Named after the enigmatic Serbian-American inventor, Nicole Tesla, Tesla Inc. is an automotive company dedicated towards the use of sustainable energy, keeping in mind the state of our planet in centuries to follow.

Tesla Automotive specializes in manufacturing Electric Cars and the motto behind the establishment of the company was to challenge the common belief held by many that electric vehicles were compromises and can never provide the experience parallel to gasoline cars. Founded in 2003, headquartered at Palo Alto, California, the company has been nothing less than a revolution in the world of automobiles. The company also manufactures solar panels, which reiterates their motto of making the present better without jeopardizing the future.

The Model S, a fully-electric sedan manufactured by Tesla, has given new life to the hope of vehicles that do not use gasoline. Released in 2008, the Model S has surely nailed the coffin of the dogma of considering electricity operated vehicles as a compromise. This revolution will surely awaken people around the world to the reality of the decaying planet abused to the limits by homo-sapiens and make them consider electric cars as a favorable option, not just as a downgrade from the traditional automobiles.

How Much Does It Cost to Insure A Tesla Automotive?

Cars manufactured by Tesla are among the most expensive to automobiles to insure. Although the insurance prices depend on various other factors, in general, getting a Tesla insured proves to be much more expensive than most luxury cars out there and the questions like How much does it cost to insure a Tesla often get eyebrow-raising answers.

Based on Annual Premium, the cheapest Tesla to insure as of 2018 was the Model 3 at $1913 per annum. The most expensive among Tesla Automobiles, the ground-breaking sedan Model S stands at nearly $3000 per annum and is among the most expensive cars to insure across the globe.

The insurance costs depend upon the model you choose, but customers can get trims on auto insurance too. Hence, the higher trim levels you choose, the more features you get, the higher your insurance costs will be. For instance, a Tesla Model S with 100D trim would automatically result in higher insurance costs when compared to a Model S with 75D trim. This happens because of the higher trim levels, the more expensive they are to replace, which means, insurance costs are optimized as well.



On What Factors Do the Insurance Costs Depend On?

The insurance costs on Tesla Automotive depend upon a variety of factors. Each of these factors has an impact on insurance rates.

These factors include driving history, the location where the insurance plan is located and the total amount of coverage one chooses to purchase. Apart from these, various models result in different insurance costs coupled with the reduction in the trim levels of the automobile which alters the answer to the question of “How much does it cost to insure a Tesla”.

In General, electric vehicles are more expensive to insure compared to their gasoline counterparts. According to the GEICO reports, insuring an electric automobile costs 1.23 times more than the gasoline ones.

In a nutshell, to insure a Tesla, one will have to pay 15% to 30% more than other luxury and standard vehicles. The cover for collision is the primary factor which makes it so much more expensive to insure electric vehicles, especially the ones manufactured by Tesla.

Why Are Electric Cars More Expensive to Insure?

Although Tesla automobiles are seen as cars for the future and the expensive insurance covers that come with them, this does not deflect potential buyers from making the purchase. Additionally, the ones becoming aware of the environmental crisis our planet is going through may be reluctant to buy a Tesla just because it is expensive to insure. These automobiles provide a much-needed solution to the impending crisis and are rightly termed as cars for the future.

Many people are curious as to why are the electric cars more expensive to insure when compared to the gasoline cars? This difference is primarily because electric cars are comparatively more expensive to repair and hence the parts that are to be insured come at higher prices. With gasoline cars, the parts are more or less the traditional ones which can be easily found and are not as advanced as the electric cars.

Apart from the straight up difference in the cost price, there is another major factor which makes insuring electric cars expensive. Electric cars like the ones manufactured by Tesla are built with complicated components. High-priced batteries cannot be easily tended to by an ordinary technician; hence, the basic body shop of your insurer might not have technicians with the required intricate knowledge for getting a Tesla serviced.

This is the primary reason why the insurance costs for a Tesla wouldn’t differ much from insurer to insurer irrespective of how it is powered.

Why Is It So Expensive to Insure A Tesla?

Buying a Tesla comes with a long list of positives, but there’s one thing many might consider a major obstacle. Quite many potential consumers give up on buying a Tesla when they come to know about how expensive it is to insure a Tesla and compare it with the price of other luxury cars. The car for the future is surely costly to insure, but whatever the difference is, it is still worth the money owing to the positives that come along with it.

The reasons, why Tesla insurance is so expensive, are few but each of those has their impact on the insurance costs. Some of those reasons are listed below;

  • Collision Coverage

First and foremost, the collision coverage forms the majority of the insurance cost ranging from 50% to 65% of the entire insurance plan.

For instance, the Model 3 has a total insurance cost of $1913 out of which $1085 is the collision coverage which is more than half the total insurance cost.

Similarly, the Model S, 90D takes a whopping $2,963 as insurance coverage. The liability coverage out of which is mere $681, and the comprehensive coverage stands at $350 while the Collision Coverage is $1,932.

With the Model X, 90D, the Collision Coverage is at $1,409 out of the total insurance coverage of $2,473.


  • Why Is Collision Coverage a Major Game changer?


Collision coverage forms the major percentage in the expensive Tesla car insurance coverage. This is because the repair of an electric cars is in general much more expensive than that of their gasoline counterparts. This means that the overall charges for repair and replacement of parts by the technicians who must be qualified and equipped to repair a Tesla, each of the expenses are more than traditional automobiles.

This is more so with the case of Tesla automobiles which undergo repair and replacement in special Tesla owned and operated workshops.


  • Electric Cars Cost More


Electric cars, in general, are more expensive to repair as already mentioned above. It is owing to the fact that these cars are made up of complex components which require certain specific capabilities and skill sets to repair and re-engineer.

With Tesla, the quality of repair services provided, adds on that little bit more to the entire repair cost which stands at an average of $2,450.



  • Tesla Body Repair Shops


Tesla automobiles are hybrid vehicles, hence, these vehicles are repaired and serviced at workshops which are approved by Tesla, Inc. The workshops require tremendous quality and expertise to become approved by Tesla which means that huge costs are incurred in ensuring the quality of the services in repair and replacement.

Huge costs are incurred in maintaining the repair cycle and these workshops are also limited in number which works as another reason in increasing the cost of insurance coverage.


  • Expensive Frames and Exteriors


In case of significant damage to the exterior, the frame of Tesla Automobiles, especially that of the Model S is made up of aluminium which is more expensive and trickier to repair when compared to the traditional steel frame of other cars.

Owing to these reasons, minor damage to your Tesla can carry your insurance coverage costs to thousands of dollars. Moreover, with the latest cars being manufactured with more complex components and customized parts and technology, the collision coverage prices are expected to reach new heights.

Even though Tesla cars are not as prone to crashes and accidents as compared to other automobiles, it is only wise to keep in mind the size of the claim on the part of the insurer when an accident occurs.

What Does the Future Hold for Tesla Insurance Costs?

With the introduction of a new insurance company owned by Tesla, the Tesla Insurance Company, people planning to buy Tesla automobiles are hopeful about positive changes to the affordability of insurance coverage on Tesla cars.

According to the company, three strategies are to be used to reduce the huge insurance costs on their automobiles. These three strategies will significantly reduce the insurance coverage on all the different models if the company is to be believed.

These three strategies are as follows;

  • With Tesla Insurance Company, repairs on Tesla automobiles are expected to come cheaper. The company says that it will repair all the models of the car internally at a fraction of the price charged by the options available in the industry. If this is going to be the case, then the comprehensive coverage and the collision coverage prices will get reduced significantly.
  • The new insurance company will also hand out discounts on a variety of aspects of the insurance plan. Especially drivers with a clean driving record in the last three years will receive discounts up to 20%. If the driver in question does not have an at-fault ticket or accident record in the last five years, the discount will get increased to 35%.
  • Commission rates will also be lowered as the Tesla-owned insurance company will charge a lesser commission on insurance which will benefit Tesla owners fatigued by paying expensive insurance coverage.
  • Apart from these major cuts, there is a host of other discounts that the Tesla Insurance Company will give to its customers which include the Good-driver discount, The Multi-policy discount, Anti-theft device discount, Air Bag Discount and the Loyalty discount among a few others.

Although it is too early to come to a conclusion about how the new insurance company will affect the insurance costs of Tesla automobiles, the promises made do inspire hope in the hearts of Tesla owners. The plethora of discounts coupled with special coverage and cheaper repairs, the Tesla Insurance company promises a lot, it is left to see, though, if it would have any tangible effect on the Tesla car insurances.

Cars for The Future

Streets filled with Tesla cars will not just be a dream come true for the company but would also be a positive when it comes to the longevity of life on our planet. Electric vehicles are not the complete solution, but, they are surely much better than gasoline cars which are among the top agents responsible for the decay and pollution our environment is going through.

The Tesla Insurance Company’s arrival and the promises it has come up with regarding the reduction in the insurance coverage costs for Tesla automobiles, is surely a ray of hope. There are lots of people who want to buy a Tesla and contribute their bit for protecting the planet but are often reluctant and unsure owing to the huge average insurance coverage costs for Tesla automobiles.

If the new insurance company is to be believed, the cuts in the insurance costs will inspire those people to go a step ahead from thinking about it and end up with a Tesla themselves. Hopefully, questions like why Tesla insurance so expensive would cease to exist and the expensive insurance coverage won’t prove to be an obstacle in the way of people wanting to buy a Tesla.

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