Tesla is telling its insurance clients that it is reducing rates for March and April amid the pandemic, but there’s a catch.

Last year, Tesla launched its own insurance program, starting with availability in California, where the automaker claims up to 30% cheaper premiums than the competition.

It’s Tesla’s second entry in the insurance industry after its InsureMyTesla program in partnership with third-party insurers.

The new program is directly brokered by Tesla through State National Insurance, and the automaker is much more involved in the entire process.

With shelter-in-place orders, most people are driving a lot less these days, which should reduce premiums.

Several insurers automatically reduced premiums over the last few weeks.

In California, insurance commissioner Ricardo Lara ordered insurance companies to return insurance premiums to consumers and businesses and provide much-needed financial relief during the COVID-19 emergency.

Lara said:

With Californians driving fewer miles and many businesses closed due to the COVID-19 emergency, consumers need relief from premiums that no longer reflect their present-day risk of accident or loss. Today’s mandatory action will put money back in people’s pockets when they need it most.

Yesterday, we reported that Tesla owners insured with the automaker could call the company to reduce their mileage and save money.

Today, Tesla sent an email to its insurance clients to tell them that they will issue a 20% credit for everyone in March and April:

Dear Tesla Insurance Customer, To help support our customers during these uncertain times, Tesla Insurance Services is providing you with a 20% credit for your March and April auto insurance payments. We will automatically credit the card on your account most recently used for payment. No action is required on your part with credits issued automatically in the coming weeks. If you have any questions, please contact us at (844) 348-3752. Thank you, Tesla Insurance Services

However, the catch is that we are hearing Tesla was issuing much better discounts when customers were calling to reduce their mileage.

A source who is insuring a Model 3 in Los Angeles with Tesla Insurance called them, and they lowered his insurance from $207 to $113 for the month.

That’s a 45% discount.

Another source tried to do the same today after Tesla issued the email, but the automaker said that this 20% credit is their new policy for the situation during the pandemic.

Electrek’s Take

It looks like Tesla is trying to save some money here by directing people to the 20% credit.

If your mileage has been greatly reduced due to the pandemic, I would still contact Tesla Insurance and have them reduce your mileage. I think the difference in price should be much greater than 20% based on what I’m hearing right now.

Let us know in the comment section if you are attempting this and how it turns out.

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