How Much Does It Cost to Insure a Tesla?

Tesla cars have exploded in popularity over the last few years. However, there’s one question that frequently appears online: how much does it cost to insure a Tesla?

The so-called “car of the future” is certainly more expensive to insure than an average vehicle. Today, we’re going to explain how much it costs to insure a Tesla – including whether or not you can afford it.

tesla car insurance

There Are Three Tesla Model Types

Tesla has released three main vehicles so far. The newest model, the Model 3, is priced at $35,000 USD, making it the cheapest Tesla released to date.

The Model S, meanwhile, is priced at around $70,000 (although the model with the most inclusive trim will cost about $135,000), while the Model X costs between $86,000 and $136,000, depending on your trim.

Keep in mind that the more you pay for your Tesla, the better its battery life will be, and the faster your car will go. Buying the “most inclusive trim” version isn’t just about aesthetics.

We’ve seen a growing number of insurance quote requests for the Model 3. After all, a $35,000 car is within the budget of an average middle class family. However, cautious vehicle buyers are naturally concerned about the insurance costs.

Tesla Insurance: Things to Consider

Does insuring a Tesla cost more than insuring a car with a similar price tag? Here are some things to consider.

Expensive Cars Cost More to Insure than Cheaper Cars

We don’t need to explain much about this. A $30,000 car is almost always going to cost more to insure than a $20,000 car. If you’re upgrading to a Tesla from a cheaper car, you can expect a significant bump to your insurance.

Electric Cars Cost More to Insure

Electric cars cost more to insure than their gas counterparts, all things being equal. GEICO reports that it’s about 1.23 times more expensive to insure an electric vehicle compared to a gas vehicle. However, State Farm only charges about 1.07 times more to insure an electric vehicle (Source).

Luxury Cars Cost More to Insure

Luxury cars tend to get in more collisions than ordinary vehicles. In fact, according to a report by the Institute of Highway Safety, five of the ten worst cars for collision insurance are categorized as luxury vehicles (the other five are sports cars). Tesla CEO Elon Musk has famously said, “We don’t make slow cars.”

Even though the Model 3 is priced at a more affordable $35,000, it will still be insured as a luxury car.

Ultimately, upgrading your insurance to cover a luxury car might not be quite as expensive as you think. If the value of the vehicle is equal, then a luxury car will cost about 6% more to insure than a non-luxury car (assuming the vehicle’s value is between $30,000 and $35,000).

You know the factors behind the cost of insuring a Tesla. Now, let’s look at some specific pricing details.

How Much Will It Cost to Insure My Tesla?

Right now, in New York, you can insure the $70,000 version of the Tesla Model S with GEICO for approximately $1,750 per year.

Since the Tesla Model 3 has not yet been released, we don’t have specific insurance figures. However, the Huffington Post researched insurance quotes for the Kia Soul EV, an electric car that sells for $32,000. Insurance was approximately $1,446 per year in New York. Obviously, the Kia Soul EV isn’t a luxury car.

Based on the information we know above about luxury cars, the Model 3 should cost about 6% more to insure due to its luxury car status. That puts the Model 3’s insurance at a rate of around $1,500 to $1,600 per year in New York.

What about the more expensive Tesla models? Nerd Wallet did a comparison between insurance providers and found that the Tesla S60 typically had policies priced between $1,900 and $2,300 per year.

States with the highest Tesla ownership – Illinois and California – had the lowest average insurance rates for Tesla vehicles.

Conclusion

The Tesla Model 3 is known for its affordable price tag. At $35,000, the Model 3 is within the reach of an average middle class budget. Based on the information above, you’re going to pay slightly more for insurance – mostly because the Model 3 is classified as a luxury vehicle. However, the price difference is not quite as significant as you think – reports suggest it’s only around a 6% difference compared to other electric vehicles.

Compared to a standard gas vehicle in that price range, however, you’re going to pay anywhere from 15% to 30% more to insure a Tesla.

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