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The Truth About Tesla Insurance

May 4, 2021

The Story of Tesla

No we're not talking about Nikola Tesla from 1856, we are talking about the American electric vehicle company Tesla. Founded in 2003 by Martin Eberhard and Marc Tarpenning later owned by Elon Musk in 2008, the companies success has swept silently across the country in the form of multiple electric vehicles.

From the Model X to the Model S, americans have shown their constant love for the electric vehicles as Tesla makes up 79% of all electric vehicles in the US. But it doesn't stop there as Tesla is not just involved in the automotive market, as they have acquired up to 35% market share in solar panels according to J.P. Morgan. Although Tesla is said to be a force to be reckoned with, they still have their downsides and misfortunes, which comes in the form of Tesla Insurance.

Captive vs. Independent

In short, captive insurance agents are contracted to work for one insurance company at a time and can only sell the policies from that company. On the other hand, independent agents are contracted to work with a variety of insurance companies and can sell policies from multiple providers.

The benefit of going with a captive is that if you already know what you want, you already know which insurance company you want to work for, a captive agent can give you that quick transaction. The benefit of going with an independent agent, also called an independent broker, you get the benefit of choice, and the convenience of not having to do the research yourself. Just tell the broker what you're looking for and they'll find you the best option.

Tesla Insurance

At first glance you might think "wow" Tesla has their own insurance that they provide to their loving customers? The answer is no. Tesla does not own their own company, they are technically a brokerage, or a group of independent agents that sell insurance from State National Insurance. Elon was smart and opened up his own insurance agency representing State National insurance. I’m not sure if Elon opened the company up himself but in any case, “Tesla Insurance” is not an insurance company, it’s an insurance agency just like any other agencies in the country. They don't have their own insurance they sell another company's insurance to you under their brand.

State National Insurance had more than twice the industry average of consumer auto complaints filed against them in 2020 compared to other companies, according to data from the national association of insurance commissioners.

The Cost

What is the cost of all of this? And how does it compare to other auto insurance prices offered to tesla owners? The cost of auto insurance for a Tesla may vary significantly based on the model and trim you choose, as well as other factors that are normally taken into account when determining car insurance rates. These include your driving history, location and amount of coverage purchased.

Surprisingly, the newest model of Tesla, the Model Y, is the least expensive model to insure. While it's not the cheapest car Tesla makes, it is a slightly larger crossover than the Model 3.

Based on research done by Value Penguin, the most expensive Tesla to insure is the Model X, Tesla's high-end vehicle. Below, you can see an insurance cost comparison for each new Tesla model for a sample driver in California, based on quotes from State Farm, Geico and Progressive.

What should you do?

If you're currently looking for insurance for your Tesla you may be asking "So what? Tesla insurance is the only option I see." Well it seems you are in luck. Tesla Insurance isn't the only option, in fact, for a Model X it will cost about $3,314 with Tesla Insurance and about $2,363 with Progressive. But our suggestion would be to talk to a local broker, or our office, as there might be better options out there that might provide you with better overall coverage while simultaneously being cheaper!

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