Tesla has just announced a major update to its insurance program in California, bringing underwriting in-house and offering discounts to customers who switch.
This move is a strategic shift aimed at giving Tesla more control over pricing and claims while making its insurance more affordable for owners.
But what does this mean for California Tesla owners? How does it compare to Tesla’s insurance in other states? And what’s next for Tesla’s growing insurance business?
Let’s dive into the details.
Tesla Brings Insurance Underwriting In-House
In a move that signals Tesla’s deeper commitment to its insurance business, the company will now underwrite its own policies in California through Tesla Insurance Company, rather than relying on State National Insurance Company, which handled it previously.
- What This Means: Tesla will have more control over pricing, claims processing, and policy structures in California, just as it does in other states where it offers insurance.
- Why It Matters: This shift could lead to faster claims processing, better customer support, and potential cost savings for Tesla owners.
Exclusive Discount for California Customers
To encourage customers to switch to the new Tesla Insurance policy, the company is offering a 3% discount on a full-term premium for those who opt in before the deadline.
How to Get the Discount:
- Customers must elect to switch to the new Tesla Insurance policy.
- The deadline to switch is four days before March 14, 2025.
For Tesla owners in California, this discount is a great incentive to explore the new policy and potentially save on their insurance costs.
How Tesla Insurance Works in Other States
Unlike California, Tesla Insurance in 11 other states uses real-time Safety Scores to determine insurance rates. This means that safer drivers pay lower premiums based on their actual driving behavior.
States Where Tesla Insurance Uses Safety Scores:
- Arizona
- Colorado
- Illinois
- Maryland
- Minnesota
- Nevada
- Ohio
- Oregon
- Texas
- Utah
- Virginia
Why California Doesn’t Use Safety Scores
Due to privacy laws in California, Tesla cannot use real-time driving data to adjust insurance rates.
Instead, it relies on traditional factors like driving history, location, and vehicle model—similar to conventional insurance companies.
Tesla Expanding Insurance Discounts for FSD Users
In addition to the California update, Tesla introduced new discounts for drivers in Texas and Arizona who use Supervised Full Self-Driving (FSD) for at least 50% of their driving.
Why This Matters:
- Tesla is rewarding FSD users who rely more on autonomous driving.
- This could be a step toward lower insurance costs for FSD users in the future.
- It encourages more drivers to engage with Tesla’s FSD technology, potentially accelerating adoption.
Tesla’s Global Insurance Expansion
Tesla isn’t stopping with the U.S.—it’s now eyeing China as the next big market for its insurance business.
- In August 2024, Tesla officially registered an insurance brokerage in China, signaling a potential future launch.
- In June 2024, Tesla hired former Geico executive Allen Laben to lead insurance partnerships, with a mission to lower Tesla insurance premiums across the U.S.
Laben’s Goal:
“Make Tesla vehicles EASY and ECONOMICAL to insure… lower the total cost of Tesla ownership and accelerate the world’s transition to sustainable energy.”
This move suggests that Tesla is working not just to expand its insurance business, but also to make owning a Tesla more affordable overall.
Where Can You Get Tesla Insurance?
Tesla currently offers its insurance program in 12 U.S. states, with plans to expand further.
Tesla Insurance is available in:
- Arizona
- California*
- Colorado
- Illinois
- Maryland
- Minnesota
- Nevada
- Ohio
- Oregon
- Texas
- Utah
- Virginia
(*California policies do not use real-time Safety Scores due to privacy laws.)
With Tesla continuously improving its insurance offerings, pricing, and global reach, more states—and even more countries—could see Tesla Insurance soon.
Should You Switch to Tesla’s New Insurance?
If you’re a Tesla owner in California, switching to the new Tesla Insurance policy could be a smart move, especially with the 3% discount offer.
- Lower potential premiums
- More control for Tesla = faster claims and better pricing
- Potential for future discounts as Tesla refines its insurance model
For Tesla owners in other states, the use of real-time Safety Scores continues to be a game-changer, allowing drivers to pay lower premiums based on safe driving habits.
With expansion into China and more states likely on the way, Tesla Insurance is quickly becoming a serious player in the auto insurance industry—and could eventually reshape how EV insurance works worldwide.
Would you switch to Tesla’s new insurance policy? Let us know in the comments.