Vandalism Against Teslas on the Rise, But Will It Impact Insurance?
New York (CNN) — Reports of vandalism targeting Teslas have grown, coinciding with rising criticisms of Tesla CEO Elon Musk. This has sparked questions about whether this trend will influence insurance costs for Tesla owners.
While an ongoing wave of vandalism could potentially elevate insurance rates, experts say that it is currently too early to tell. “It isn’t something drivers need to be worried about happening today,” said Shannon Martin, an insurance expert at Bankrate. “But it is something they need to keep their eye on in the future, especially potential Tesla owners.”
Insurance for Teslas has historically been more expensive than that for similar vehicles, whether they’re gasoline- or electric-powered. According to Insurify, a company that compares insurance rates, this is due to the advanced technology and costly batteries that make Teslas pricier to repair. Insurify states that fixing a damaged Tesla costs about $1,300 more than a gasoline-powered car. These costly repairs are a factor when insurers determine premiums for Tesla drivers.
Based on Bankrate data from this month, the average annual premium for full coverage of a Tesla Model 3 sedan is $3,495. For a Tesla Model Y SUV, the premium is $3,771. The full-size Model X SUV has an average premium of $5,459. In comparison, the electric Ford F-150 Lightning pickup truck has an average insurance cost of $2,942, which is slightly higher than the national average of $2,678 for all vehicles.
According to Insurify, Teslas are among the most expensive vehicles to insure in the U.S. A rise in vandalism claims could lead to higher premiums. However, a significant increase in vandalism incidents would be needed to impact insurance rates or denial of coverage. Currently, these incidents remain sporadic and anecdotal, with documented vandalism occurring in various locations across the country. Drivers who have experienced vehicle vandalism would be the first to be affected.
Car Insurance Complexity
Multiple factors influence car insurance premiums, including the vehicle’s make and model and whether it is regularly parked outdoors. Vandalism contributes to rates, but collisions and a driver’s record hold more weight for insurance companies, as stated by Matt Brannon, a data journalist at Insurify, in a statement provided to CNN. Vandalism typically doesn’t affect third-party or collision coverage as it doesn’t involve another vehicle; any impact would primarily be on comprehensive coverage.
According to Brannon, the initial response from insurers, if a sustained or increasing rate of vandalism is observed, could be to decline new policies to Tesla drivers, specifically in areas with high vandalism rates. “They either resume writing those policies once vandalism has declined, or they can raise their rates to equate with the heightened risk that is being attributed to this vandalism,” he said.
Mark Friedlander, media relations director at the Insurance Information Institute, noted that he is unaware of any insurers that have stopped issuing policies to Teslas.
Tesla also offers its own insurance, but it is only available in 12 states, and its rates are not publicly disclosed. Most car insurance policies are renewed in six-month increments, which is when an insurer could decide to renew the policy or adjust the premium.
Limited Precedents
The social media trend that saw a challenge on TikTok showing how to steal Hyundai and Kia cars is the only recent relevant example. Between early 2020 and the first half of 2023, thefts of Hyundai and Kia models rose by over 1,000%. Despite the companies releasing anti-theft software updates, numerous insurers declined to provide coverage for these vehicles.
Bankrate’s Martin noted that insurance companies responded differently; while some stopped insuring the affected cars, others simply opted not to add comprehensive collision coverage to a vehicle that didn’t already have it.
According to Brannon, the first step taken by most insurers was to cease issuing policies for the impacted vehicles.
CNN has reached out to Tesla, Geico, Allstate, and State Farm for comment regarding Tesla insurance rates.
