Tesla insurance costs are climbing fast—here’s why

Auto insurance prices for American consumers continue to rise across the board thanks to inflation—but Tesla premiums are accelerating at a much higher rate due to brand-specific pressures.

Driving the news: Per a CDG analysis of Insurify data—over 50 vehicles (including ICEs and EVs), full insurance coverage on four Tesla models (3, X, S, and Y) is about 70% higher than the overall average.

The reasons? Teslas have advanced technology, including complex battery systems, sensors, and a lack of aftermarket proprietary parts.

• Meaning—that repairs need specialized technicians and equipment—which often drives up costs. And higher repair costs lower the threshold for total losses.

• Certain Tesla models have a much higher frequency of insurance claims than their competitors, according to Mitchell International. In 2024, The Model Y had the most insurance claims, at 31.43%, followed by the Model 3 (29.85%) and the Ford Mustang Mach-E (6.37%). (Repairable EVs, in general, have higher claim payouts—around $1,200 more than ICEs.)

• And insurance risk ratings for Tesla tend to be higher due to the amount of power they put out compared to the cars in their class.

To be fair—when Bankrate’s insurance team analyzed average annual premium data for the most popular EV models, nearly every vehicle cost more to insure than the national average of $2,678.

Yes, but Tesla is also facing a problem unique to its brand: an uptick in vandalism. As a result of CEO Elon Musk's role in the Trump Administration—Tesla cars have been keyed, shot at, lit on fire, and defaced with swastikas in recent weeks. And since insurance companies factor in thefts and vandalism into the rates they set—Tesla premiums could be affected—but it's too early to tell.

Bottom line: With premiums adding hundreds to monthly payments, buyers with a less-than-stellar driving record might start looking at cheaper EVs—or even gas cars—instead.

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