What to Know about the Tesla Insurance Hike

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On June 4, 2017, Automotive News released an article about an auto insurance hike for Tesla vehicles.

According to this article, AAA – The Auto Club Group is, so far, the only company that has been vocal about raising their rates for Tesla vehicles. However, the high-priced, electric car company disagrees with AAA’s reasoning.

Continue reading to get the whole scoop.

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Why will Tesla’s auto insurance rates increase?


In some states, Tesla’s rates with AAA could go up 30 percent! The insurance company notes that costly, frequent insurance claims for Model S and Model X are to blame for this significant increase.

Since Tesla models are made from sturdy, high-quality materials and are expensive to purchase, they are also expensive to repair after collisions.

And due to several costly claims filed for these vehicles, AAA seems concerned with how the costs could hurt their business if they don’t make a change.

So where did AAA get their data? They cite their own company numbers as motivation, but they also relied on comparable data from the Highway Loss Data Institute (HLDI) — which affirmed their decision to raise rates.

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What does Highway Loss Data Institute (HLDI) say?

The HLDI report covered data from the car model years of 2014 to 2016. They compared how often a claim was filed and the magnitude of each case with the overall average claims filed on particular cars.

The report also noted each car’s class, categorizing Tesla’s Model S as a large luxury vehicle and Model X as a large luxury SUV.

In analyzing Tesla cars and comparing them to the total number of vehicles on the road, the report indeed found what AAA described: the frequency and cost of Tesla insurance claims are well above average.

To break it down further, HLDI stated that collision claims filed for large luxury vehicles (such as Model S) are reported 13 percent more often than the average car.

And here’s where money puts things in perspective: the price tag on those claims is about 50 percent higher than the average cost of claims for other cars.

Model S’s claims cost more than double the average amount, and 46 percent more claims are filed for this vehicle than for the average car.

Large luxury SUVs generally hover around average with how often collision claims are taken out, but the costs rise 43 percent above average. With Model X specifically, 41 percent more claims than average are reported, and they are even more expensive than those for Model S — 89 percent above the average cost of any vehicle’s insurance claim.

What does Tesla say?

Tesla objects to HLDI’s analysis because they feel their cars have been inaccurately classified. They don’t think that other cars included in the Large Luxury Vehicle Class — such as the Volvo XC70 — are on the same level as their Model S.

After all, a Model S driver is much less likely to be injured compared to someone driving an XC70.

Tesla prides themselves on constructing cars with strong materials like aluminum that contribute to impact-absorbing “crumple zones.” The way the cars are built helps prevent them from rolling over.

The automobile company also explains that Model S and Model X have a much higher acceleration rate than other classified luxury vehicles. However, it’s unclear how Tesla would prefer their cars to be categorized.

What does our data show?

Telsa Running Totals

Click here to see the full graphic

We crunched some numbers and discovered that, as of June 2017, a total number of 212,278 Tesla vehicles have been sold since 2012. Six fatalities resulting from Tesla crashes have occurred since 2012. Although zero deaths would be ideal, six is still a low number for that many Teslas — 0.0028 percent.

These fatalities took place during 2014 to 2016, with one death occurring in 2014, one in 2015, and four in 2016. Although our data doesn’t cover the reportedly high amount of collision claims, we have to agree with Tesla that their cars are some of the safest out there.

In fact, when we look back at the first Tesla death, we don’t see anything the car company could have done to keep it from happening.

A car thief stole the Tesla and drove it at almost 100 mph when he eventually hit three other cars and two street poles that ultimately cut the car in two and ejected him from the front half of the vehicle. The driver didn’t die until later in the hospital; the fact that he didn’t die sooner is a testament to how strong and protective Teslas truly are!

Still need more convincing?

Model X has received a 5-star crash rating in every category and sub-category. It’s the first SUV to get a perfect safety score! Out of any SUV that the National Highway Traffic Safety Administration has ever evaluated, this one has the lowest likelihood of injury. As for vehicles overall, only Model S has beaten Model X in this category.

Will Tesla’s insurance continue to increase?

image source

image source

The more Tesla cars that contain semi-autonomous technology, the lower auto insurance rates could go. After all, semi-autonomous vehicles are safer, thus lowering the risk for crashes.

Since Autosteer, a part of the Autopilot system, has been included in Tesla vehicles, their collision rate has declined by 40 percent. Autosteer allows a car to steer on its own in particular circumstances, while the driver remains fully attentive to the car’s behavior and the road’s conditions.

Usage-based insurance companies — which determine drivers’ rates based on how they drive — combined with tech like Autosteer, can keep Tesla rates from hiking everywhere.

Root Car Insurance is an example of a usage-based insurance company. They choose to only insure upstanding drivers, which helps them maintain fair rates, and they track your driving behavior through a phone app. The better you drive, the more you’ll save with Root.

Even better, if you drive a Tesla that has Autosteer, Root will give you a discount!

If you drive a Tesla, especially one with the special “self-driving” technology, consider using Root for your car insurance needs instead of AAA. Just remember to always drive carefully, and rest assured that you drive one of the safest vehicles on the planet.

Enter your zip code to compare rates for three to four different policies. And be sure you review your policy at least every six months!

Complete Data: Running Totals of Tesla Vehicles

– To view and sort the table by category, click on header columns.

– Click here for the full stats.

For all media inquiries, please email: Joshua Barnes

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