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For Those That Need To Know

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Insurance rates on Tesla Model 3 approach those of Porsche 911

Tesla's Model 3 may have cut the initial cost of owning one of the company's vehicles, but insuring even the most affordable Tesla remains surprisingly expensive.

The average Model 3 insurance cost across 150 ZIP codes is $2,814 per year, which is $35 less than the cost of insuring a Porsche 911, according to Gabi Personal Insurance Agency Inc., an online insurance shopping site.

"In the last month we had more and more people coming in with Model 3, and they were all complaining about high insurance costs," says Gabi CEO Hanno Fichtner. "We found cheaper deals for them, but not as cheap as we thought they would be. We even had customers tell us they are returning their Model 3 due to the high running costs."

Insurance costs vary from area to area. The Model 3's costs ranged from $1,958 to $3,644 per year. For comparison, in the same 150 ZIP codes the average annual cost was $2,102 to insure a Chevrolet Volt Premier and $2,068 for a Honda Civic LX.

Tesla's higher-end Model S and Model X have long been known to have relatively high insurance costs, and Gabi's analysis showed that insurance for the 75D versions of those vehicles cost more than $3,410 per year. For comparison, an Audi R8 supercar cost $3,519 annually to insure.

According to Fichtner, the high cost of replacement parts and Tesla-specific body shops are major contributors to the high insurance costs. Collision insurance accounted for 49 percent of the insurance quotes collected in the Gabi analysis, and in some cases as much as 59 percent. Collision insurance accounts for only 40 percent of the cost of Gabi's Porsche insurance quotes, on average.

After AAA raised insurance rates on Teslas last year, the electric-vehicle maker responded with a statement saying "this analysis is severely flawed and is not reflective of reality." Tesla subsequently partnered with Liberty Mutual to create a product called InsureMyTesla, which Jon McNeill, then president of sales and service for Tesla, said "takes into account not only the Autopilot safety features but also the maintenance cost of the car."

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Tesla did not respond to a request for comment.

Tesla owners have posted on a number of forum threads that InsureMyTesla's costs are consistently higher than the competition. This summer, Tesla CEO Elon Musk responded to a tweet about the high cost of the product, saying, "Looking into this. Will fix if so."

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