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What’s the Best Car Insurance for Tesla Drivers?

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by Nick Versaw Updated April 22nd, 2022

Best insurance for Tesla: Tesla Model S

The test drive is over, all your favorite features have been included, and you’ve signed the dotted line on your new Tesla. But before you drive your new or used Model S, X, Y, or 3 off the lot, it’s a good idea to know what types of car insurance coverage you should get for your Tesla vehicle.

Insurance companies don’t make specific rates public, and the cost of your particular policy will have many factors involved. But that doesn’t mean you can’t take efforts to save on the coverage you think you’ll need.

As of this writing, the national average car insurance policy in the United States is $1,056.55 per year, according to the Insurance Information Institute. According to a recent report by the Harvard Business Review, the average Tesla costs around $2,000 per year to insure — about $1,000 more than the average rate.

The cost of insurance premiums varies widely from driver to driver and is dependent on factors like driving history and the desired amount of coverage you’d like to purchase. In this article, we’ll explore how Tesla car insurance rates are determined, check out some additional coverage options you might be interested in, and give you the basic information you’ll need to find the best insurance for your new all-electric vehicle.


 

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How Tesla Insurance Rates Are Determined

Best insurance for Tesla: man happily driving his car

Auto insurance rates are determined by a variety of factors. In addition, insurance providers all use unique algorithms and criteria to determine their rates. If you’re looking for the best insurance for Tesla vehicles, several personal factors will go into how your rate is determined. These include:

  • Your age
  • Where you live (and store your car)
  • Your driving record
  • Make and model of your vehicle
  • Your car’s safety features
  • Your car’s repair costs

While Tesla founder Elon Musk originally set out to build an all-electric vehicle that could be afforded by the masses, several Tesla electric cars are considered to be luxury vehicles. These include the Tesla Model S Long Range (manufacturer’s suggested retail price: $94,990), Tesla Model X Long Range (MSRP: $111,490) and Tesla Model X Plaid (MSRP: $126,490). While these models are more affordable when you buy them used, they’re still a big investment.


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It makes sense that the more expensive a vehicle is, the more expensive it is to insure — so the pricier your new Tesla is, the pricier it will be to get auto insurance coverage. But that doesn’t mean you can’t take precautions to keep your car insurance costs as low as possible.

Best Basic Insurance Options for Tesla Drivers

Insurance companies offer a wide array of insurance products — not all of which are mandatory to drive your Tesla. Drivers looking for the cheapest car insurance for their Tesla can opt for the most basic coverage. While choosing the bare minimum in auto insurance coverage can help you save, it’s not always the most practical way to go.

Having only bare minimum auto insurance coverage can leave you liable for several types of accidents and causes of injury out on the road. In addition, damage to your vehicle may not be covered, which can result in very expensive repair costs. So while you’re saving up front on the average cost of insurance, opting for a bare bones policy may only cost you later. 

Nevertheless, basic coverage would likely include:

Liability coverage

Auto liability coverage is required in nearly every state, but states don’t allow drivers to only carry liability coverage. Liability policies help you pay for injuries to others if you cause an accident in addition to property damage you cause while you are driving.

Choosing only liability coverage (if your state allows that) can help keep your insurance rates low, but may not cover you in every incident.

Uninsured Motorist Coverage

Underinsured and uninsured coverage helps pay for your medical bills if your vehicle is struck by an uninsured driver. Depending on the particulars of your coverage, it may also help pay for repairs to your vehicle.

These two types of coverage represent the bare minimum car insurance coverage that one can carry.

Best Car Insurance Add-Ons for Tesla Drivers

Happy family in a car

Looking for a robust insurance package for your new car? There is no “full coverage” option when it comes to buying car insurance. You can, however, combine a variety of coverages under one policy and one monthly premium.

Choosing the best insurance for Tesla vehicles will likely include a policy with both mandatory and optional coverage that will likely cost more than the national average premium. That said, choosing a diverse array of coverage can protect your investment, yourself, and your passengers in the event of an accident or other unforeseen circumstance.

Comprehensive Coverage

Comprehensive car insurance coverage, as the name implies, can cover you for damages if your vehicle is stolen, destroyed in a fire, or damaged in any unforeseen events like hail or vandalism. 

Comprehensive coverage almost always features a deductible that policy holders are required to pay before their insurance kicks in to cover the costs. For example, if your deductible is $500 and the repair bill is $2,000, you have to pay $500 out of pocket and your insurance will pay the remaining $1,500. 

Collision Coverage

Collision coverage can potentially reimburse you for all damages resulting in hitting other vehicles or objects. If you’re in an accident with another car or hit a stationary object like a sign or fence, a collision coverage policy may reimburse you for damages to your vehicle.

Medical Payment Coverage

Medical payment coverage helps to pay for the costs of hospital visits, surgery, and X-rays in the event you or one of your passengers suffer bodily injury in an auto accident. The specific treatments and procedures covered can range from policy to policy.

Personal Injury Coverage

Personal injury protection, sometimes referred to as PIP, is not available in every state. Similar to most optional car insurance policies, the range of things covered in a PIP policy can vary based on both state laws and personal needs. For example, child care expenses and lost income due to a car accident are some of the few things a PIP might cover.

Tesla Insurance

The best insurance for Tesla cars may arguably be the policies offered by the automaker itself. The Tesla corporation offers a wide range of its own car insurance policies to Tesla drivers. The Tesla website states:

Tesla uniquely understands its vehicles, technology, safety and repair costs, eliminating traditional insurance carriers‘ additional charges. Tesla Insurance provides a convenient monthly payment and reflects Tesla’s active safety and advanced driver assistance features which come standard on all new Tesla vehicles.

As of this writing, however, only Tesla owners in Arizona, California, Illinois, Ohio, and Texas are eligible to purchase Tesla Auto Insurance

Tesla-brand insurance offers all traditional coverage types such as liability, collision, comprehensive, and uninsured motorist policies. They also offer coverage options such as gap insurance, car rental reimbursement, and roadside assistance coverage. In addition, Tesla’s Electric Vehicle Protection Package offers Tesla wall charger coverage as well as electronic key replacement.

Find the Best Insurance for Your Tesla With Compare

Keeping a good driving record and credit score and taking advantage of insurance discounts like multi-vehicle policies are all ways you can help yourself get the best insurance rate for your Tesla. It also helps to shop around for the best rate. When you utilize Compare.com’s insurance comparison tool, you can immediately survey car insurance quotes for your new Tesla from the nation’s best car insurance companies, all in one place:


 

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