Tesla Insurance Offers 30% Cheaper Rates, Program Now Available In California

Tesla Inc. on Wednesday announced the launch of Tesla Insurance, whose operations will first start in its home state of California.

It describes Tesla Insurance as “a competitively priced insurance offering designed to provide Tesla owners with up to 20% lower rates, and in some cases as much as 30%. Tesla Insurance offers comprehensive coverage and claims management to support our customers in California, and it will expand to additional U.S. states in the future.”

The company said Tesla owners in California can purchase a Tesla Insurance policy in about a minute via a dedicated webpage at tesla.com/insurance. As for new vehicle orders, customers can request a quote prior to delivery once a VIN has been assigned to their Tesla account.

Tesla Insurance also offers a convenient monthly payment with no hidden fees or charges. It said customers can cancel or change their Tesla Insurance policy at any time. Owners that want to insure multiple Tesla electric vehicles (EVs) might also be eligible for further discounts.

The company claims its competitive pricing reflects the benefits of Tesla's active safety and advanced driver assistance features that come standard on all new Tesla vehicles. This unique insight into Tesla tech and repair costs helps eliminate fees charged by traditional insurance companies.

Tesla Insurance said it will use data taken from Tesla’s global fleet to help determine insurance rates.

The cost of each insurance policy will also be based on an applicant’s driving record and “other factors that can typically impact a person’s insurance rates,” noted Tesla Insurance. The company pledges not to use or record vehicle data (such as GPS or cam videos) when pricing insurance.

Tesla insurance won’t cover commercial services. These no-no’s include using a Tesla EV for ride-hailing or car-sharing services.

The launch of Tesla Insurance harkens back to Tesla CEO Elon Musk’s statement in April the company will launch an insurance company “in about a month.” Musk said the new firm will be “much more compelling than anything else out there.”

Musk also revealed Tesla has an “information arbitrage opportunity,” meaning a Tesla EV is able to capture driving data. This capability gives Tesla direct knowledge of the risk profile of the driver and car.

Musk also pointed out that if customers want to buy Tesla insurance, they might have to agree to “not drive the car in a crazy way.” But he also said they can drive crazy, but will have to pay a more expensive insurance rate.