Why Tesla is Getting Into the Insurance Business: Tesla has fascinated the world with its cool and fast electric cars. Now it wants to disrupt a related industry: insurance. Tesla has been quietly selling car insurance for the last couple of years. But it won’t be quiet for much longer.
CEO Elon Musk believes insurance will one day account for a third of Tesla’s business. It will be much more compelling than anything else out there. Tesla started selling personal car insurance in California in 2019 and claims drivers can trim their insurance costs by as much as 20% or 30%.
Data compiled by the personal financial website ValuePenguin shows Tesla Insurance is not the cheapest in California but it is amongst the least expensive. It is said to be the least costly plan in Texas where Tesla has a lot going on.
A new Gigafactory is being built near Austin. And Musk permanently moved to the Lonestar state to be closer to SpaceX’s rocket facility for Starship. State regulators there have reportedly approved the rates and policies for Tesla Insurance which, according to data compiled by ValuePenguin, is $1,795 on average.
Individual rates do differ greatly depending on your driving record, age, how much coverage you choose, and the Tesla you buy. The Model Y mid-size SUV is the least expensive to insure.
And if you take the Model S, rates could be more expensive for the Plaid, which goes 0 to 100 in 2.1 seconds compared with the long-range version’s 3.2 seconds. So, why can Tesla afford to offer lower insurance rates?