Getting the Insurance Right for your Tesla

The buzz around Tesla automobiles is understandable. They’re great cars, offering world-class performance, tons of cool technology and they’re electric to boot! They even receive wireless vehicle software updates. The problem is they’re all custom made. If you want a Ford Explorer, you can head to your nearby Ford dealer and likely have several to choose from. If you want a Tesla, you place your order and wait months.

Similarly, if you get in an accident with your Explorer, you can bet there’ll be a body shop nearby with the right replacement bumper. But if you wreck your Tesla, it might be difficult to even find a body shop that will do the work. Then, there’s the wait for parts—it could easily take three to six months for replacement parts to ship to your repair shop.

Tesla’s justifiably generated a big reputation, and an equity value to match. Tesla’s are the top-selling electric car in the US, and analysts suggest there could be millions on the road by the early 2020s. But the fact is, compared to the major auto makers, for now at least, Tesla is still a small company.

Tesla’s current production is largely focused on building new cars to sell, not on manufacturing replacement parts. So, you can expect to wait for parts for your banged-up Tesla. Meanwhile, if your auto insurance is with a middle market company like State Farm, Farmers, or Allstate, your policy might provide you $30 to $50 a day to cover the cost of renting a temporary replacement with a 30-day limit.

Where does that leave you for the next five months while you wait to get your Tesla back? Probably paying out of your own pocket for that rental replacement. You’ve got a $100,000 car sitting in the shop and an insurance company that’s left you on your own.

That disconnect between the car you’ve bought and the insurance you’ve purchased to cover it could be huge. That’s why, when you buy a Tesla, you have to make sure you buy the insurance coverage that’s right for the car.

High net worth insurers provide much higher limits of rental reimbursement or loss of use coverage. Our market survey of high net worth insurers found Nationwide Private Client offering $2,500 in rental reimbursement limits with the option to purchase up to $7,500, PURE providing $5,000 in limits, AIG with limits of $10,000 and Chubb and Cincinnati offering limits up to $15,000. That can put you back in a luxury vehicle for longer than 30 days while you wait for your Tesla to be fixed.

Another important consideration is that high net worth insurers will make sure your body shop uses original equipment manufacturer (OEM) parts to fix your car, not aftermarket substitutes.

If you’re a Tesla owner, you drive a great car. But you need to think about what will happen if a bit of bad luck keeps you from being able to drive it for a while. The wrong insurance will leave you not only missing your Tesla but paying out of your pocket for a replacement while your Tesla sits in the shop.

The right insurer, though, will provide the coverage you really need for your Tesla, helping keep you happily on the road while your body shop waits for parts. And with the right insurer you can be sure that when you get your car back the parts used to repair the damage were worth the wait.

Contact a Swingle Collins & Associates Insurance Advisor for more information or call 972-387-8700.