Best Inexpensive Insurance For Tesla | Here’s What Pros Say You Should Pay

How much should you pay for your Tesla Insurance? Which is the best inexpensive insurance for Tesla? In the guide below, we let you in on this important car ownership aspect.

Teslas are expensive vehicles and their insurance is not cheap at all. Are you curious if you will get ripped off or not by car insurance agents? Read along to learn about what others are paying for Tesla insurance in 2021. We offer essential information to help you make that crucial decision.

Most of the states here in the U.S. require auto insurance. The prices vary depending on multiple factors such as make and model. When compared to various luxury cars, Teslas are more expensive when it comes to insurance because of high repair costs. This also makes the cost of collision coverage more expensive as well.

Tesla models typically range from $39,000 to $129,000. Repairing vehicle damage or replacing it entirely may be expensive. If proven to be at fault for a car crash and don’t have insurance, expect a huge amount of out-of-pocket damages. Car insurance is essential to keep your finances safe.

What to Expect

To understand the insurance cost for a Tesla, it is essential to know that the model and trim should be taken into account. Location, driving history, and the amount of coverage purchased also helps to determine car insurance rates.

Unexpectedly, Tesla’s newest car, the Model Y, is considered the least expensive among all models in terms of insurance rates. Even though it is not the cheapest model, it is a larger crossover compared to the Model 3. Among all of the Tesla vehicles, the high-end Model X is the most expensive to insure.

To acquire a clear idea regarding the monthly premium cost, you need to determine what you require from the following types of available coverage.

Understanding the Types of Coverage

Insurance For Tesla

Liability Insurance

Liability insurance covers drivers against any personal injury and damage to property. Tesla is not as dangerous compared to other vehicles and you probably won’t have to acquire more liability coverage than usual. Purchase the state minimum and just add extra for covering the medical bills and potential lawsuits that might arise from an accident.

Personal Injury Protection

Covering you plus your passengers in case of an accident, PIP will assist in taking care of medical bills, no matter who caused the actual accident.

Collision Insurance

Collision Insurance covers any type of damage to your Tesla due to collision. Tesla cars are made out of more expensive materials compared to other cars. This results in more expensive repairs.

Comprehensive Insurance

Comprehensive insurance practically covers damage caused to your Tesla vehicle by anything aside from another vehicle. This may also cover the theft of your vehicle.

Insurance for Each Tesla Car Model

According to MotorTrend, below are the usual insurance costs per Tesla model.

Tesla Model 3: $2,114-$2,351

Tesla Model S: $3,673-$4,143

Tesla Model Y: $2,118-$2,227

Tesla Model X: $3,355-$4,025

Reasons for the Insurance Rate

Probably curious why the cost of insurance for Tesla cars is that high? The most significant contributor that factors in is collision coverage. Collision damage is expensive because of high maintenance and repair costs.

There are several reasons why the cost of Tesla Insurance is more expensive even when compared to other luxury cars.

The battery is one critical aspect that affects the insurance rate. Designed to last between 300,000-500,000 miles, Tesla batteries are not typical and are usually more complicated to repair. To give you an idea, an estimated cost to replace the battery of the Tesla Model 3 ranges from $3,000-$7,000.

Teslas are repaired via a limited set of body repair shops approved by the company. Both the training and equipment for a qualification already include high expenses incurred.

Electric cars are more expensive to repair already and therefore insure.

The aluminum frame of the Model S is already more difficult and expensive compared to a steel frame. Even small fender damage can already incur thousands of dollars.

As more technology and custom parts get integrated into the car, the cost per collision definitely increases as well.

All Car Insurance Premiums On the Rise in 2021

Insurance For Tesla

If you are worried about the rise in car insurance premiums this year, there are reasons that you need to know right away. Car insurance premiums have been on the rise in 2021 due to the decline of insurance costs in 2020. Consumers were not driving too much last year because of the COVID-19 pandemic and people spent more time at home than on the road. Due to this, insurers issued refunds. However, here in the United States, premiums are going back to pre-pandemic levels because more people are driving now and are expected to file claims. In addition, auto repair costs play a role in increasing car insurance premiums.

Insurance Companies Offering the Cheapest Insurance for Tesla


USAA is the top insurance company fit for a Tesla Model 3. The average annual insurance rate for a Tesla Model 3 is $1,145. The only drawback about USAA Tesla insurance is that not everyone can avail of this because only members of the military and their families are able to qualify for a policy.

State Farm

State Farm’s average annual rate for a Tesla Model 3 is around $1,943.


Liberty’s insurance is among the cheapest insurance options for Tesla vehicles. One Tesla owner has even claimed to acquire a $265 full coverage in Washington!

Here’s What Tesla Owners Say

I have State Farm with full coverage and pay $1,100.00 per year

– Terry H.

I have AAA and the quote went from $2,700 a year to $4,500 a year. Lexus NX 300 to Model Y. State Farm quoted me $3,200.

– Annie K.

We went from a 2019 Acura RDX to a 2021 Tesla M3LR and we pay $83 more per year.

– Mike M.

I replaced a 2012 Fusion hybrid with a 2014 MS and the difference was $400/yr, same full coverage.

– Jeffory M.

$145/mth w/ Mercury. 2021 Model 3.

– Amber L.

I was just quoted $717 for full coverage 1 year to add 2021 Model 3 LR – Liberty Mutual.

– Jess J.

Costco. Hands down. Saved me $2500 a year.

– Tyler B.

Costco for me, too. I am paying a similar amount as I paid for Honda Crosstour prior to I own M3 in 2019. Little over $300 every 6 months. I have had Costco Auto insurance for over 20 years now. I also saved $1000’s for both of my children when they first got their licenses and cars. You just can’t get Costco Auto insurance as a new client in Florida anymore. But if your state has access, definitely get a quote from them.

– Phillip H.

If you are in CA, Tesla insurance is hands down the best. Added my wife’s Mercedes and saved $400 annually from my prior Progressive policy (with a low-value old BMW.)

– Brad B.

State Farm in (Alabama) only went up $ 5 from the previous car $103/mo.

– Johnny V.

USAA wanted $1,025 for 4 vehicles and 4 drivers (2 teens) Progressive we only pay $465/month.

– Dawn E.

Liberty mutual $265 full coverage! Washington!

– Elia J.

How to Reduce Tesla Car Insurance Costs?

Change to a Different Company

Pros advise getting quotes from different companies to gauge the best offers. As mentioned above by Tesla owners,  you will be able to assess the best options

Add or Remove Coverage

Also mentioned above are the different types of coverage for Tesla cars. If you aim to reduce your car insurance costs, you can opt to remove a type of coverage.

Frequently Asked Questions about Tesla Insurance

How much is a Tesla?

A new Tesla ranges from $40,000-$120,000. This depends on the model and trim chosen. Including self-driving capability or picking a paint color aside from white can add more to the sticker price. Additional customizations also make the price go up.

Are Tesla cars expensive to insure?

If you compare a Tesla’s insurance rate to the average annual cost to insure a vehicle in the United States, Tesla is clearly more expensive. It is recommended to acquire multiple quotations and get the best offer from different insurance companies. 

Which Tesla model is the most expensive to insure?

The Tesla Model X is the one with the most expensive insurance rate. This is not the newest car in the lineup but its high-end features lord over the other models.

Which State has the cheapest Tesla Model 3 insurance?

Maine has the least expensive Tesla Model 3 insurance with an average cost of $1,245 per annum. On the other hand, Louisiana is the state with the highest Tesla Model 3 insurance rate at $3,346 per year.


Tesla cars offer so much to get overlooked because of insurance rates. The high-quality materials and parts of Tesla vehicles make the brand somewhat unique. Tesla car insurance is justified by the high repair costs. The best move is to gather multiple quotations from various car insurance companies and choose the best deal. Never be scared to own a Tesla just because of the insurance rates. Testimonies from lots of Tesla car owners can help validate the top companies offering the best inexpensive insurance.

Michael Schuck

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