Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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If you drive a Tesla, or are thinking about acquiring one, you should definitely consider the insurance piece of the puzzle beforehand.

It can be more expensive than you think to buy car insurance for an electric car, especially a new model that has no track record for which insurers can base rates.

Interestingly, one car insurer in the UK is now offering a discount for Tesla drivers who put the car in Autopilot mode.

The company in question, Direct Line, said while it was too early to tell if the self-driving feature could justify a lower premium (thanks to fewer accidents), it wanted to encourage the use of technology to “aid research.”

Hmm…while that sounds noble, we’ll chalk it up to a clever move to garner press. Guilty as charged as I write this.

For the record, the company is only offering a five percent discount, which could still price the policy quite high relative to other cars, and even other electric cars.

As we already know, electric cars cost more to insure than their gas-guzzling predecessors, so a small discount won’t be enough to offset the substantially higher cost.

However, the move seems prudent considering the fact that crash rates among Tesla models have fallen some 40 percen since the Autopilot feature was debuted.

Cheapest Electric Cars to Insure in 2017

1. Fiat 500e
2. Kia Soul EV
3. Nissan Leaf
4. Volkswagen e-Golf
5. Smart ForTwo Electric Drive
6. Mitsubishi i-MiEV
7. Ford Focus Electric
8. Hyundai IONIQ Electric
8. BMW i3
10. Tesla Model 3**

The list above comes from Mercury Insurance and Nerdwallet. As you can see, Tesla Model 3 insurance is at the bottom of the list in terms of affordability.

And that’s for the Tesla Model 3, which is the cheapest car the company produces. It’s unclear if Mercury even offers insurance for all the Tesla models.

But the takeaway is that insuring a Tesla probably isn’t cheap.

It also seems obtaining insurance for a Tesla can be tricky, relative to other vehicles, which might have something to do with their short history, and/or perhaps their uniqueness and price tag.

At the end of the day, car insurers determine rates by looking at historical figures, and when car models are brand new, you may pay a premium (no pun intended) for the unknown.

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InsureMyTesla from Liberty Mutual

This might explain why Tesla seems to have an exclusive partnership with Liberty Mutual to provide car insurance to its owners (and Direct Line in the UK).

The two companies have come up with a comprehensive insurance plan known as “InsureMyTesla,” tailored to Tesla vehicles only.

It offers the following features:

  • New car replacement
  • A guaranteed rate for one year (unless a mid-term change in underwriting risk)
  • Genuine Parts Replacement
  • Optional 24-Hour Roadside Assistance
  • Optional Rental Car Reimbursement
  • Claims Valet Service (drop off a rental or schedule a car swap at an agreed upon time/place)

While none of those features are necessarily noteworthy, they might have a better handle on insuring Teslas, meaning you should be able to get coverage for all new Tesla models with less trouble or confusion.

It’s unclear if their pricing is any better than the competitors, but at least you’ll know they offer car insurance coverage for Teslas.

As you would any other model, it’s probably wise to take the time to shop around with multiple providers and/or an independent insurance agent who can do so on your behalf.

You’ll also want to take the extra step of inquiring about any specific discounts for items the Tesla has that other vehicles don’t, such as the Autopilot feature.

It may also be possible to save money by keeping the annual mileage low on the vehicle, which some Tesla drivers may do considering the range is limited, and may result in a lot of short trips and city driving.

If for some reason your primary insurer won’t provide coverage for your Tesla, it’s not the end of the world to insure it with a secondary company.

The only downside, other than working with two companies, is that you might lose out on a bundled discount.

Tip: If you are looking to insure a Tesla, you’ll want to make sure your driving record is flawless to ensure you can obtain coverage at a reasonable price. And take extra care to avoid any tickets or points while you are covered.