Auto Insurance

What Tesla Owners Should Know About Insuring Their Luxury Car


The Tesla Model S and Model X are amazing cars that bring an unmatched level of luxury and performance to the automotive industry. Tesla, however, also presents some challenges to traditional car insurance. While you may be tempted to think that any basic policy will do, this isn't necessarily true, and you could end up paying more for subpar coverage.

You need a different level of coverage available for these new-generation vehicles, and you'll likely have to shop around to find the best deal, as some Tesla models don't qualify for every type of coverage available.


Despite the luxurious feel of driving a Tesla or any luxury vehicle, there will always be the fear of getting into an accident. If you've had an accident in the past, you can expect to pay more for insuring your Tesla. In a big city, drivers can expect to pay at least $2,000 annually to insure their Tesla. However, drivers in a small city or town may not have to pay as much.

Overall, Teslas get into more accidents and cost more to repair than any other vehicle in the same class, so it's important to choose the right policy as you consider the cost of insurance.   

Actual Cash Value

Most standard auto policies provide actual cash value coverage, which represents the value of your vehicle, taking into account its condition and factoring in depreciation.

Stated Value

A stated amount policy means that the insurer will pay the lower amount of either repair costs, the stated policy amount, or the vehicle's actual cash value.

Agreed Value

Typically, this is the best policy to have. If you get into an accident, a policy with agreed value will cover the loss up to the agreed amount stated in your policy.

These policies do not have actual cash value stated anywhere in the coverage, but you'll still want to verify that your insurer uses an accurate value for your Tesla when they issue the policy. Also, if that value changes at any time, you want to have the option to change the agreed-upon value as well.

  • If you discover an insurance program offering agreed value terms for physical damage coverage, compare it with the overall cost of insuring your Tesla vehicle.

Discount potential

Although the cost of Tesla insurance claims may rise, Tesla Model 3 and Model S owners may be eligible for several discounts. Teslas are semi-autonomous vehicles, so some insurance companies will offer discount programs based on that criteria alone.

Teslas are also electric, and many insurance companies offer discounts to drivers of environmentally-friendly vehicles. You can also save money on auto insurance through rebates or tax incentives provided by your state or federal government.


Additional collision and comprehensive insurance coverage are recommended for Tesla owners. The cost of this coverage runs about $1,000 to $2,000 annually. However, if you get into an accident without this coverage and no other insurance, you might have to pay thousands of dollars out-of-pocket to repair your vehicle. Different physical damage deductibles are usually available for this reason. But remember the higher your deductible, the lower your premium.

  • Not all insurance policies will allow you to insure custom items you've added to your Tesla, so it's important to disclose any customizations up front. Of course, the best way to determine if a policy suits your needs is by asking your agent about policy restrictions and warranties beforehand. It is also helpful if this insurance agent has a good relationship with insurance company underwriters. 
  • For most car owners, auto insurance is a simple process – it's a monthly or quarterly bill that you write a check for, and then hope you'll never have to file a claim. But when driving a Tesla, or any other vehicle with advanced technology and features, coverage isn't quite as simple. Consider if it's worth investing in special insurance to cover your Tesla.

Get Your Luxury Car Insured Today With Highline Risk Solutions

If you own a Tesla or another luxury car brand, you already know that finding an insurance policy that provides optimal coverage at a reasonable price can be a challenge. It's not just about finding the right carrier—you also need to make sure you're getting the right policy with the right limits and deductibles.

We can help you find the right balance of coverage and price so that you're protected in case of any accidents or damage to your vehicle. Contact us today for a free quote. 


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