Leasing a vehicle like a Tesla can be a great option for drivers who want to be behind the wheel of the latest and greatest models. Once you’re done with your leased vehicle, you can simply replace it with another.
However, that’s only true if you follow the rules of your lease agreement. Failing to stick to these rules can make leasing your Tesla much less affordable than you’d like it to be. Let’s get into everything you should know about your Tesla lease insurance requirements.
What Insurance Do I Need for a Tesla Lease?
As with most leases, you’ll need a somewhat extensive insurance plan to cover your Tesla. You need liability, collision, and comprehensive insurance — what’s known as “full coverage” insurance. Full coverage insurance isn’t a single policy, but a mix of these three types of policies.
Tesla Liability insurance
Odds are, you live in a state that requires you to have a minimum of liability insurance. Each state has its own minimum limits for liability coverage, but you’ll need more than state minimum requirements for your Tesla lease. Your Tesla lease liability insurance limits have to cover at least:
- $100,000 for bodily injuries per person
- $300,000 for total bodily injuries per accident
- $50,000 for property damage
Liability insurance pays out when you are at fault for someone else’s injuries or property damage. This helps financially protect you (and Tesla) from having to pay out of pocket for damages you might cause in a collision.
Tesla Collision Insurance
Collision insurance helps you pay for damages done to your vehicle in a crash. This type of insurance may come into play regardless of who is at fault unless the other driver is found to be at fault and their liability insurance takes over. The Tesla lease insurance requirements call for you to have an insurance plan that covers the full value of the vehicle. Keep in mind that when calculating how much your vehicle is worth, an insurance company will use its actual cash value, which may be lower than the Tesla’s lease value.
Tesla Comprehensive Insurance
Collision insurance doesn’t cover your Tesla in every situation. Since you must insure your Tesla for its full value in all situations, you’ll also need to have comprehensive insurance. Comprehensive insurance helps you pay for damages caused by non-collision situations.
Situations in which comprehensive insurance would come into play include vandalism and theft, fires, hail, falling objects, and more. With both comprehensive and collision insurance policies, you’ll be covered in most foreseeable situations that might damage your Tesla and leave you with a repair bill.
Like collision insurance, comprehensive insurance’s limits are based on the actual cash value of your Tesla model. Tesla requires you to insure the full value of the vehicle, so be sure it’s completely covered by the insurance policies you sign up for.
Tesla Personal Injury Protection
Not necessarily a part of full coverage car insurance but still required by Tesla, personal injury protection helps pay for your medical bills and that of your passengers. Personal injury protection insurance kicks in regardless of whether you or another driver is at fault for the accident.
Cost of Tesla Insurance
Getting full coverage insurance for your leased or purchased Tesla is going to cost more than it would for many other makes and models of vehicles. Full coverage insurance is generally the most expensive plan you can purchase for any vehicle. The fact that you’re buying it for a Tesla is just going to raise the price.
This is because Teslas are considered to be luxury vehicles. Despite consistently scoring very well on safety through the National Highway Traffic Safety Administration (more safety features in a vehicle generally means less money you have to pay to insure it), insuring Teslas can get expensive.
According to Insurance.com, it costs an average of $2,257 annually to get full coverage insurance for a 2021 Testla Model 3. This is certainly something to keep in mind if you’re trying to lease a luxury model on a budget.
Other Things You Should Know About Tesla Insurance
Teslas are highly specialized vehicles that you can’t take to just any shop. An aspect of your lease agreement may be that you get it serviced regularly as a Tesla-approved service center. Be sure that you have one such center within a reasonable distance to save yourself the headache when it comes time to give it a check-up.
If you’re trying to save money on your Tesla insurance by raising your plans’ deductibles, you should be aware that Tesla only allows you up to a $2,500 deductible as part of the lease agreement.
The lease agreement for your Tesla comes with gap insurance. Gap insurance is good to have when the amount you owe on a vehicle is greater than the actual cash value of the vehicle.
Tesla Insurance
If you live in one of these states, you can purchase insurance directly through Tesla:
- Arizona
- California
- Colorado
- Illinois
- Nevada
- Ohio
- Oregon
- Texas
- Virginia
To sign up for Tesla insurance, all you have to do is follow prompts through the Tesla app. If you have multiple vehicles, you can bundle them through Tesla Insurance, even if they aren’t Tesla vehicles.
In all of the states above except for California, Tesla will use your real-time driving behavior to decide how much it’s going to charge you for insurance. The safer you are on the road, the less you’ll have to pay for your Tesla Insurance. Tesla makes a point of using this real driving data instead of traditional factors such as your credit score or age to calculate your premium.
Getting thoroughly acquainted with your lease, insurance, and vehicle maintenance tasks is an important part of being a vehicle owner. Look through our blog section to learn more about everything you need to know to be a responsible car owner and get the most out of every vehicle you drive.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
