How Much Does Tesla Insurance Cost?

Tesla insurance can be expensive, but new coverage options are emerging. To get the best rates, shop around.

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A Tesla electric car isn’t cheap — the company’s lowest-priced vehicle costs roughly $40,000 for the base model — and buying insurance for it isn’t either. Despite the cars’ high safety ratings, Tesla insurance can be significantly more expensive than the same coverage for other popular vehicles.

To give Tesla fans an idea of what to expect, NerdWallet checked rates for full-coverage auto insurance on the lowest-priced Tesla, the Model 3. Here’s what we found.

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Average cost of Tesla Model 3 insurance

Tesla Model 3 insurance costs an average of $2,215 per year, or about $185 a month, our analysis shows. That’s nearly 40% higher than the national average cost of car insurance.

But rates vary widely from one insurer to the next. Among the five largest car insurance companies in the U.S., price differences for Tesla car insurance can be more than $1,000 a year.

What company has the cheapest Tesla car insurance?

Progressive has the cheapest rates on average for Tesla Model 3 owners among the nation’s largest insurers. Although USAA has lower rates, it was not included in our analysis because it is offered only to military members, veterans and their families.

To find the cheapest Tesla auto insurance, make sure to check smaller regional providers as well. They may beat out the bigger players in your neighborhood.

Tesla Model 3 insurance rates from large companies

Company

Average annual rate

$1,815

$1,943

$2,565

$3,331

$1,145

* USAA isn’t ranked because it is available only to active military, veterans and their families.

How much does Tesla car insurance cost in my state?

Tesla Model 3 insurance costs aren’t fixed across the U.S., with average annual rates for full coverage ranging dramatically by state.

  • Maine has the lowest average cost to insure a Tesla Model 3, coming in at $1,245 annually.

  • Louisiana has the highest average cost to insure a Tesla Model 3, at $3,436.

While the price you pay might vary based on your location, you’re likely to spend more than your non-Tesla-owning neighbors for auto insurance. Of the 25 most popular cars in the U.S., the Tesla Model 3 is the most expensive to insure, on average, in every state except New York, where it comes in second to the Toyota Highlander LE.

Below are the average Tesla Model 3 insurance rates in each state.

You can save money by shopping around to find the cheapest Tesla car insurance. The table below shows the cheapest average rate we found in each state, which could be anywhere from $300 to $2,000 below the state average.

We didn’t include USAA in our analysis because it’s available only to active military, veterans and their families, but it's also worth a look if you're eligible. In 30 states, USAA offered the cheapest rates for Tesla auto insurance.

Tesla Model 3 insurance rates by state

State

Cheapest average rate

Cheapest provider

$1,252

Travelers

$1,372

Progressive

$1,141

Nationwide

$1,239

Southern Farm Bureau Casualty

$1,725

Kemper

$842

American National

$1,404

Nationwide

$1,394

Nationwide

$2,155

State Farm

$1,281

Nationwide

$1,248

State Farm

$510

American National

$768

Pekin

$714

Pekin

$898

Hastings Mutual

$1,212

Farm Bureau Financial Services

$1,948

Grange

$2,067

Southern Farm Bureau Casualty

$715

Concord Group

$1,268

Nationwide

$686

State Farm

$1,410

Pioneer State

$1,021

Farm Bureau Financial Services

$1,358

Mississippi Farm Bureau

$1,653

Missouri Farm Bureau

$1,474

Nationwide

$997

Nationwide

$1,349

Progressive

$767

Concord Group

$1,349

Plymouth Rock

$1,430

Farm Bureau Financial Services

$606

Main Street America

$1,170

State Farm

$1,118

Nationwide

$739

Hastings Mutual

$1,612

Progressive

$981

Nationwide

$1,041

Penn National

$1,129

State Farm

$624

American National

$1,220

Farmers Mutual of Nebraska

$1,141

Grange

$1,351

Nationwide

$1,039

Nationwide

$793

Nationwide

$827

Nationwide

$933

Oregon Mutual

$1,472

Erie

$1,073

Nationwide

$895

Hastings Mutual

$1,813

Farmers

* Rates weren’t available for Tesla’s own plan, Tesla Insurance, which is offered only in California.

Why Tesla insurance is so expensive

The more your car costs, the more it costs to insure. If you’re in an accident and need repairs, your collision insurance is going to pay unless it was totally someone else’s fault. And if your Tesla is stolen, it’ll cost your insurer more to replace it than a less expensive vehicle, so it’ll charge you more for that coverage.

How much is a Tesla?

Teslas are expensive compared with many cars, priced similarly to luxury cars and other electric vehicles. For example:

  • Tesla Model 3. The cheapest Tesla starts at about $40,000 for its basic trim, Standard Range Plus. Upgrade to the Long Range Model 3 for about $49,000 or to the Performance Model 3 for just under $57,000.

  • Tesla Model Y. This car costs about $52,000 for its base trim.

  • Tesla Model S. The Model S jumps up in price with a starting cost of nearly $80,000 before add-ons and upgrades.

  • Tesla Model X. This car’s base price starts at nearly $90,000, with upgrades costing tens of thousands.

Upgrading beyond the basic model can send your Tesla cost skyrocketing. For example, you’ll pay $10,000 to add self-driving capability, and any paint color other than white will set you back an extra $1,000 to $2,000. The more features you add to your Tesla, the more it will likely cost to insure.

Tesla repair costs

Teslas are made out of expensive parts, contributing to their base cost. For starters, a Model 3 battery costs thousands of dollars to replace.

Tesla repair costs are also higher due to the cars’ aluminum bodies, which are much more expensive than those made with traditional materials. If you damage a plastic or steel part on your 2012 sedan, an auto body shop can fix it for relatively little cost. The same isn’t true for aluminum.

All of those potential repair costs come back to owners in the form of higher Tesla car insurance prices. To ease the burden, the carmaker is rolling out an insurance option it says will be less expensive called Tesla Insurance.

What is Tesla Insurance?

Tesla is now a licensed broker providing insurance in California from State National Insurance to Tesla drivers. The company claims drivers can save 20% to 30% over the cost of insurance through other carriers.

You can currently buy Tesla car insurance for the following vehicles: Model S, Model X, Model 3, Model Y and Roadster.

How Tesla Insurance works

Tesla says it understands how drivers use its cars and takes all of the vehicles’ safety features and crash avoidance systems into account when pricing insurance. The company says it doesn't currently use personalized driving data collected by the vehicles in its pricing.

In addition to liability, collision and comprehensive insurance, Tesla also offers additional coverage for wall chargers, electronic key replacement and identity fraud.

In its initial filings, Tesla Insurance also included collision and liability car insurance discounts for the use of autonomous driving features, ranging from 5% to 30% depending on the level of autonomy in use. Families with multiple Teslas would also be eligible for discounts.

Tesla is currently looking to expand its insurance offering into three additional states — Texas, Illinois and Washington — with the eventual goal of selling policies across the U.S.

Until then, keep rates down by comparing several car insurance quotes to make sure you're getting the best deal.

Frequently asked questions

A brand-new Tesla costs anywhere from about $40,000 to $120,000, depending on which model and trim you choose. Adding self-driving capability, choosing a paint color besides white and other customizations can increase the sticker price.

The average annual cost to insure a Tesla Model 3 — $2,215 — is nearly 40% higher than the average national cost of car insurance, according to NerdWallet’s analysis. Tesla says its own insurance can save drivers 20% to 30%, but policies are currently available only in California. If you live elsewhere, check multiple companies to find the best car insurance quotes for you.

The company currently offers insurance for Tesla owners in California, including a mix of standard coverage (such as liability, comprehensive and collision) and coverage for wall chargers and electronic keys. Tesla plans to roll out its insurance across the country in the future, but for now owners outside of California will have to shop around for car insurance rates from other companies.

Methodology

NerdWallet averaged insurance estimates from the largest insurers in all 50 states and Washington, D.C., for the base Tesla Model 3. Rates were for 40-year-old male and female drivers with good credit, no tickets or violations, and with the following coverage limits:

  • $100,000 bodily injury liability coverage per person.

  • $300,000 bodily injury liability coverage per crash.

  • $100,000 property damage liability coverage per crash.

  • $100,000 uninsured motorist bodily injury coverage per person.

  • $300,000 uninsured motorist bodily injury coverage per crash.

  • Collision coverage with $1,000 deductible.

  • Comprehensive coverage with $1,000 deductible.

In states where required, minimum additional coverages were added. Some policies include additional coverages at the insurer's discretion. These are sample rates generated through Quadrant Information Services. Your own rates will be different.

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