Incidents of vandalism targeting Tesla vehicles are on the rise, coinciding with growing discontent towards Tesla CEO Elon Musk, whose initiatives at the Department of Government Efficiency have led to significant cuts in the federal workforce.
However, insurance experts say it’s premature to determine the long-term impact on insurance premiums, which are complicated and influenced by numerous factors. “It isn’t something drivers need to be worried about happening today,” said Bankrate insurance expert Shannon Martin. “But it is something they need to keep their eye on in the future, especially potential Tesla owners.”
Insurance costs for Teslas have been notably higher compared to other classes of vehicles, both gasoline and electric-powered. According to Insurify, a company that compares insurance rates, this is primarily because of the advanced technology and costly batteries used in Teslas, which result in higher repair expenses. Insurify data indicates that repairing a damaged Tesla costs approximately $1,300 more than a gasoline-powered car, a factor that influences the premiums charged by insurers.
Data from Bankrate indicates that the average annual premium for full coverage of a Tesla Model 3 sedan is $3,495, while the Model Y SUV averages $3,771, and the Model X SUV is notably higher at $5,459. In comparison, the electric Ford F-150 Lightning pickup truck costs around $2,942 to insure, which is slightly above the national average of $2,678 for all cars.
According to Insurify, Teslas account for the four most expensive vehicles to insure out of the 50 most popular cars in the United States.
While increased vandalism could potentially drive up premiums, significantly more incidents would be needed to trigger higher rates or even denial of coverage. At present, incidents appear sporadic and largely anecdotal with documented instances in the Pacific Northwest, the Northeast, and other areas across the country. Drivers whose vehicles have been vandalized will be the first to experience direct consequences.
Complexities of Car Insurance
The price of car insurance premiums is influenced by multiple factors, including the vehicle’s make and model, as well as whether it is regularly parked outdoors. Matt Brannon, a data journalist at Insurify, told CNN that although vandalism contributes to car insurance rates, collisions and a driver’s history typically have a more significant effect on insurance premiums.
Vandalism typically doesn’t affect third-party or collision coverage since it doesn’t involve another vehicle. However, comprehensive coverage could face an increase. Insurers could initially respond to a sustained increase in vandalism by declining to issue new policies to Tesla drivers, especially in areas where the issue is more prevalent, Brannon said.
“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,” Brannon said.
Mark Friedlander, media relations director at the Insurance Information Institute, noted that he is not aware of any insurers that have ceased offering policies to Teslas.
Tesla also offers its own insurance, but the rates are not public. It is only available in 12 states.
The majority of car insurance policies are renewed in six-month increments, giving insurers opportunities to renew policies or adjust premiums.
Historical Precedents
The last, and only recent, parallel to this situation emerged from a social media trend involving a TikTok challenge that provided instruction on how to steal Hyundai and Kia cars. Between early 2020 and the first half of 2023, the thefts of Hyundai and Kia models increased by over 1,000%.
Although the companies released anti-theft software updates, many insurers denied coverage to the affected vehicles. Bankrate’s Martin noted that insurer responses varied, with some declining coverage for the affected cars and others refusing to add comprehensive collision coverage to vehicles that did not already have it. The main approach taken by many insurers, Brannon said, was to cease writing policies for the affected vehicles.
CNN reached out to Tesla, Geico, Allstate, and State Farm for comments regarding Tesla insurance rates, but had not received any responses at the time of publication.
