Will Tesla’s brand-specific insurance coverage help lower rising costs for Australian EV owners? We find out.
US electric car giant Tesla has launched its brand-specific insurance cover in Australia, but some customers aren’t happy with the quotes they’ve received.
Launched in partnership with another Australian insurance provider, Zurich Australia, the ‘InsureMyTesla’ program is available to new and existing Tesla owners through the Tesla smartphone app.
RELATED: Are Teslas expensive to repair?
The Tesla-specific insurance offers either comprehensive or third-party policies for Tesla drivers who own a Model 3 or Model Y, the two best-selling EVs in Australia throughout the first half of 2024.
Under InsureMyTesla, customers are offered “excess free” windscreen and glass coverage, and depending on which policy drivers choose, they may be eligible for charger coverage in the event of theft and damages, as well as replacement cars “in certain circumstances” where their Tesla is written off.
When Tesla launched a similar program in the US in 2019, it claimed it would offer owners “up to 20 per cent lower rates, and in some cases as much as 30 per cent”.
However, Tesla Australia’s insurance program stops short of offering any kind of pricing guarantee, with Zurich Australia’s Chief of Strategy and Technology, Shaneen Marshall, telling Drive pricing would be “competitive”.
Marshall said trying to determine an average cost for the InsureMyTesla policies would be challenging as it “depends on a number of variables”.
When asked about pricing in comparison to other insurers, Marshall told Drive, “What I would say is it’s [InsureMyTesla] a competitive price in the market”.
‘A quote of $5.8k?’
However, some Tesla owners have started sharing their InsureMyTesla quotes online, with several returning figures that far exceed other quotes provided by traditional insurance providers.
In a recent post on the Tesla Owners Australia Facebook group, one user shared a screenshot of their alleged quote, adding: “Tesla tie up with Zurich insurance [sic] gives me a good quote of $5.8k? I thought they were trying to find insurance cheaper than NRMA which gives you for 2.6k [sic]”.
“I did mine and it was about the same, these cars are getting uninsurable,” another commenter said.
However, various Facebook users on the same thread claimed the new Tesla insurance program was the cheapest option compared to other providers.
“I found the Zurich to be the cheapest after my extensive shop around, through the Tesla app. More expensive than my former ICE [internal combustion engine], of course, but best Tesla price,” one commenter wrote.
Another Facebook user with no existing claims and currently living in regional New South Wales said Zurich’s insurance quote on their 2024 Tesla Model 3 rear-wheel drive was the “cheapest” they’d found.
“My Allianz quote was $1675, Zurich was $1580 … [Zurich offered a] $1200 excess. Allianz excess was $1100,” they wrote on the Facebook post.
One provisional driver said their Zurich Australia insurance quote exceeded $12,000, but Marshall said this was more likely a result of a young driver in a high-performance car, than the higher cost of Tesla’s insurance policies.
As Marshall explained to Drive, “Because [Teslas] are [often classified as] high-performance cars, there are a lot of insurers who don’t cover high-performance vehicles. In the hands of a very young driver, it’s dangerous. It’ll be expensive as a young driver because it’s a high-performance car, not because it’s an electric vehicle.”
Is Tesla insurance cheaper than regular insurance?
To provide a snapshot of the pricing differences between Tesla-brand insurance and other insurance providers, Drive generated a comprehensive insurance quote for a 60-year-old driver of a 2024 Model 3 Performance residing in Eastern Sydney.
InsureMyTesla quoted an annual premium of $2660. Under the same circumstances, the NRMA quoted $2734 annually – with InsureMyTesla costing $74 less in this case.
Marshall said the higher cost of electric car insurance premiums when compared to conventional cars was “a combination” of a lack of knowledge down the supply chain, and the high-tech functions featured in many EVs.
“Historically [speaking], early electric vehicles were very expensive to replace and repair, and part of that was the lack of knowledge and understanding down the value chain. Part of that was the way the cars were built, and the manufacturers needed to learn about the insurance implications of that,” Marshall told Drive.
Marshall said the reason Tesla cars often commanded a higher premium was “not [because] it’s an electric vehicle, it’s just a higher-tech car and you would see the same cost of replacement when you have cameras and sensors on Mercedes and BMW [models], for example”.
“The fact that electric vehicles are more technologically advanced and have more sensors and cameras… the cost of insurance isn’t the result of it being an electric vehicle, [it’s the] result of the type of car that you’re buying,” she added.
However, a panel beater who works at Luxury Auto Body – an independent, Tesla-certified smash repairer in Melbourne – previously told Drive that depending on the damage, Teslas are actually relatively inexpensive to repair in comparison to luxury brands.
“With the exclusion of major outliers, [Teslas cost] maybe around $4500–$5000 per repair… some of the parts on Teslas are unbelievably cheap. Something like a bumper bar – those parts are cheap. When we talk about airbags and suspension, they’re [pricier] but still considerably cheaper than a BMW or a Mercedes-Benz,” he told Drive.
The post Tesla just launched its own insurance in Australia – but is it actually any cheaper? appeared first on Drive.
