How Expensive Is It to Insure a Tesla? Costs, Explained

Is Tesla car insurance expensive? Tesla vehicles are fairly expensive, and it's important to consider the other costs like maintenance and insurance.

Kathryn Underwood - Author

Feb. 9 2023, Published 11:35 a.m. ET

Tesla Model X
Source: Tesla Media

Tesla Model X

For anyone in the market for an electric vehicle, Tesla might be an option. However, it isn't the only EV choice these days, and there are certainly other expenses to keep in mind before selecting an electric vehicle to purchase. Is Tesla car insurance expensive, and do the benefits outweigh the cost?

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Electric vehicles come with plenty of benefits including the chance to move away from reliance on fossil fuels and save money on gas. However, saving money isn't a given on every aspect of an EV. For example, the cost to insure a Tesla can be quite a bit higher than average car insurance.

Source: Tesla FB

Red Tesla car

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How much does Tesla car insurance cost in my state?

First of all, when we say Tesla car insurance, there are two possible meanings. Tesla Insurance is an insurance program by Tesla itself, and since it's only available in certain states, potential buyers need to know the cost to insure a Tesla through other insurance companies too.

According to ValuePenguin, Tesla Insurance is the cheapest way to go to insure your Tesla at this time. Currently, the states offering Tesla Insurance are:

  • Arizona
  • California (real-time driving behavior insurance not available)
  • Colorado
  • Illinois
  • Maryland
  • Minnesota
  • Nevada
  • Ohio
  • Oregon
  • Texas
  • Utah
  • Virginia
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If you're wondering whether Tesla Insurance is good, here are some of the features. For the Model S, Model X, Model 3, and Model Y, insurance using real-time driving behavior is available (except in California). Your level of safe driving and other factors like where you live and how much you drive can help reduce your premiums.

x model
Source: Tesla Media

Tesla Model 3

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How much does insurance cost for a Tesla Model 3?

Although rates will vary by state and other factors, ValuePenguin estimates the average cost to insure a new Tesla is $3,947 annually. It also gives recent average insurance costs for each model. The Model 3 is about $3,386 per year.

Other average Tesla Insurance costs:

  • Model S: $4,956
  • Model X: $4,275
  • Model Y: $3,057
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As ValuePenguin explains, the Model 3 is the cheapest Tesla to buy, but not the cheapest to insure. Buying a more expensive version of Model 3 will result in larger insurance premiums as well.

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Now, you'll want to do your online insurance comparisons by asking for quotes from multiple insurers in your area. You'll see variation in averages, as NerdWallet's estimates of average Tesla insurance are much lower than ValuePenguin's. NerdWallet analysis puts the average cost to insure a Tesla Model 3 at $2,115 annually.

According to NerdWallet analysis, State Farm offered the cheapest Tesla car insurance on the Model 3, at $1,756 per year.

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x model
Source: Tesla Media

Model 3 interior

Why is it expensive to insure a Tesla?

Insuring a Tesla vehicle will generally be more expensive than another car because it's a pricier vehicle to begin with. Parts are less readily available and more expensive to come by, so insurance will be higher than with most other vehicles. The cost to replace or repair a Tesla will be higher than other vehicles in the event of accident or theft.

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Is Tesla's insurance program cheaper than other insurers?

Although rates will vary depending on where you live, Tesla Insurance may be a cheaper option than other major insurance providers. ValuePenguin estimates Tesla Insurance to be the least expensive overall for insuring a Tesla, but remember it's only available in a dozen states so far.

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According to statewide averages in Texas for all 2022 Tesla models, Tesla Insurance came out as the cheapest option for $2,030 per year. State Farm was second cheapest at $2,626, USAA third at $2,910, and Nationwide fourth at $3,597. However, the average cost overall to insure a new 2022 Tesla for a year was $3,947.

Generally, it's best to shop around for your vehicle insurance, but if you live in a state that offers Tesla Insurance plans, you should compare rates with those of other major insurers to get the best deal.

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