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How to Estimate Your Tesla Model 3 Insurance Cost

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Updated May 16, 2022

Tesla model 3 insurance cost: man driving a car

Getting insurance for your Tesla Model 3 shouldn’t be an afterthought. Tesla insurance costs tend to be higher than that of other electric cars, so you’ll want to factor them into your budget along with other expenses like monthly lease or loan payments.

Tesla Model 3 insurance costs depend on several factors, though, so if one insurance quote is too high, it’s worth shopping around to see if you can get a better deal from a different car insurance company. The model year of your Tesla Model 3 can have an impact on your car insurance costs — but your age and location matters too.

Here’s everything you need to know about the cost of insurance for the Tesla Model 3, and what factors to consider before you drive home with a new EV.


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Tesla Model 3 Insurance Costs Explained

Buying car insurance for a Tesla Model 3 is a lot like buying insurance for any other type of vehicle. Tesla owners can purchase insurance from many of the same auto insurance companies that insure other vehicles, such as State Farm, GEICO, and Allstate.

But each insurance provider has its own process for setting auto insurance rates, and the type of car you drive is one of the biggest factors they take into account.

A brand-new electric vehicle like the Tesla Model 3 is going to cost more to insure than the cheapest car on the market. That said, there are ways to lower your Tesla Model 3 insurance costs, and you can start by figuring out what type of coverage you need.

What Type of Insurance Coverage Do You Need?

According to our figures, the average cost of insurance for a Tesla Model 3 is $318 per month for full coverage and $80 per month for liability only.

It might be tempting to look at those numbers and consider getting liability insurance only, but that probably isn’t a good idea for most Tesla drivers.

After all, liability insurance only covers damage to other vehicles, so if you get into an at-fault accident, your insurer won’t pay to repair any damage to your Tesla.

If you’re financing or leasing a Tesla, then you may be required to have higher levels of insurance coverage in order to meet the terms of your agreement. Likewise, many states have coverage minimums that are higher than the national average.

Even if getting collision coverage and comprehensive coverage isn’t legally required, chances are you’ll want to protect your Tesla vehicle with the best coverage possible. The exception is if you happen to own a really old Tesla Model 3 and the cost of car insurance for it is greater than the cost of replacing it.

Tesla Model 3 Insurance Costs vs. Other Vehicles

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It may be the cheapest Tesla on the market, but how do Tesla Model 3 insurance costs compare to other models like the Tesla Model Y and Tesla Model X?

Liability Insurance Costs

On the one hand, there isn’t much difference in the cost of a liability insurance policy for any Tesla vehicle: the average rate is $80 per month for the Tesla Model 3, vs. $79 for other Tesla models and $81 for the average non-Tesla car.

How can the insurance premium for a Tesla be cheaper than a conventional vehicle? Remember, liability insurance covers at-fault damage to other vehicles, and insurers may consider Teslas less likely to cause damage due to their safety features.

The Tesla Model 3 has a 5-star safety rating from the National Highway Traffic Safety Administration (NHTSA), and a rollover risk of only 6.60%. It also comes with safety features like automatic emergency braking as part of the Autopilot system.

Full Coverage Insurance Costs

The cost of liability insurance for a Tesla Model 3 is about average, but if you’re looking for a policy with full coverage you can expect to pay a bit more.

The average car insurance rate for internal combustion engine vehicles (aka non-electric cars) is $289 per month, but insurance for a Tesla Model 3 costs around $318 per month, for an annual rate of $3,816 per year. That’s less than all Tesla models, which cost an average of $352 per month.

Why is Tesla insurance so high? Even though Tesla’s safety features may mean you’re less likely to get into an accident, the Model 3 has expensive components such as an aluminum frame and a lithium-ion battery pack that can drive up repair costs. And of course, all of those high-tech driver assist features cost a pretty penny.

Since Tesla’s vehicle warranty doesn’t cover repairs in the event of an accident, you’ll need your own insurance policy to ensure that any repair costs are covered.

Factors that Determine Tesla Car Insurance Costs

In addition to the type of insurance policy you choose, there are several other factors that can result in higher or lower insurance costs for a Tesla Model 3.

Vehicle Age

Is your Tesla a brand-new model or has it been on the road for a while? Buying a used Tesla can be a great way to get lower insurance rates because insurers tend to charge less as the value of the vehicle goes down.

Liability insurance for a new Tesla Model 3 costs around $83 per month, while a Model 3 that’s four or five years old can cost as little as $61 per month.

Location

Where you live can have a major impact on your car insurance premium. Tesla owners in New York pay an average of $170 per month for liability insurance on a Model 3, while Tesla owners in California pay less than half that — or around $70 per month.

Not everyone can relocate to lower their insurance premiums, but it’s worth shopping around when you move to see if you can get a lower rate.

Driving History and Habits

Your driving record can also have a big impact on Tesla Model 3 insurance costs. Our research shows that a single speeding ticket can bump your liability premium up to $120 per month, while multiple tickets can result in a $138/month premium for basic coverage.

The number of miles you drive can make a difference too. If you don’t drive that often, then you may want to consider usage-based insurance, which charges you based on the miles you actually drive rather than an annual mileage estimate.

How to Reduce Your Tesla Model 3 Insurance Costs

Some factors that impact car insurance rates are fixed by your insurance company, but there are a few things you can do to lower your rates.

Choose a Higher Deductible

The deductible is the amount that you pay out of pocket when you file a claim. If your deductible is $250, then that’s the amount you’ll pay before your car insurance policy kicks in. Unfortunately, lower deductibles typically mean higher premiums.

If you’d rather pay less in premiums, you can raise your deductible to $500 or $1,000 — as long as you’re prepared to fork over that amount if you get into an accident.

You may have the option of choosing a different deductible for each type of coverage, such as property damage or injury liability insurance.

Ask for a Multi-Policy Discount

If you have multiple cars at the same address, then you may save money by getting a multi-car insurance policy. On the other hand, if you have a young driver in your family who’s heading off to college, you might want to ask for a distant student discount so they don’t drive up the cost of insuring your Tesla Model 3.

You can also bundle other types of insurance policies with the same insurer, such as homeowners or renters insurance.

Compare Multiple Car Insurance Quotes

The best way to reduce your Tesla Model 3 insurance costs is simply to shop around any time you have a change in circumstance. Whether you move to a new state, get married, or improve your credit score, ask your insurer for a better deal.

The best car insurance companies offer plenty of ways to lower your annual rates, from taking a defensive driving course to paying in full when you renew your policy.

You can use our handy comparison tool to find the best rates all in one place:


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Find the Best Insurance for Your Tesla Model 3

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Whether you have your heart set on a Tesla Model 3, or want to compare your options before you buy, check out our electric car guides to learn more about buying a new or used electric car. While it’s true that Tesla Model 3 insurance costs tend to be higher than conventional cars, overall Tesla ownership costs may be lower.

And of course, you can always consider leasing a Tesla or buying a used Model 3 to pay less for car insurance than you would for a brand-new model.

Just enter your ZIP code here to compare the best EVs side-by-side:


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