Tesla insurance premiums are on the rise in the US auto market, increasing at a rate more than twice that of other vehicles. The main factors contributing to this surge in insurance costs are higher repair expenses and a rise in vandalism cases involving Tesla vehicles.
While Tesla offers its own insurance product to help mitigate high insurance costs, many Tesla owners still opt for insurance from other providers. A recent study conducted by Insurify reveals that the average cost of full coverage insurance has increased by 10% year over year, from $2,102 to $2,302. Tesla vehicles, in particular, have seen a significant spike in insurance premiums compared to the rest of the market.
The study highlighted that the Tesla Model Y experienced the highest increase in insurance costs, rising 29% between 2024 and 2025. The average annual cost of full coverage for the Model Y reached $3,996. Following closely behind, the Tesla Model 3 and Model X also saw steep increases of 24% and 22% respectively.
The escalating insurance premiums on Tesla vehicles can be attributed to the exorbitant repair costs associated with these electric vehicles. Tesla cars are notoriously expensive to repair after a collision, leading insurance companies to often salvage them instead. To combat this issue, Tesla has opened its own body shops in an effort to control repair costs. However, these efforts have yet to yield a significant impact on insurance premiums.
The study, which analyzed 97 million insurance quotes between February 2024 and February 2025, indicates that the surge in vandalism cases against Tesla vehicles may have also contributed to the rise in insurance costs. Despite Tesla’s attempts to address the repair cost issue, insurance premiums continue to climb, posing a financial challenge for Tesla owners across the country.
