Tesla owners face rising insurance costs

Tesla owners may soon see their insurance premiums rise due to an unexpected factor: vandalism. Insurance analysts warn that increasing incidents of Teslas being damaged could lead to higher full coverage costs.

Vandalism claims climb as Teslas become political targets

Reports from the U.S., Germany, and the U.K. describe Tesla vehicles being spray-painted, set on fire, or even shot at with anti-Musk messages, targeting the brand due to CEO Elon Musk’s political involvement.

President Donald Trump has called attacks on Tesla dealerships domestic terrorism. While vandalism claims don’t usually drive up insurance rates as much as collision claims, experts warn that a sustained increase could force insurers to adjust pricing for all Tesla owners.

Teslas are already among the most expensive cars to insure. The average annual cost for full coverage on a Model 3 jumped 30% in 2024 to $4,362—25% higher than a comparable Mercedes-Benz A-Class. The Cybertruck fares slightly better at $3,813 a year, though its reputation for build quality issues may push that number higher.

Insurance isn’t the only financial pressure on Tesla owners. Used car values are falling, and demand is shifting. Searches for used Teslas dropped 16% over the past year, while interest in non-Tesla electric vehicles rose 28%. If vandalism continues, some insurers might decide the risk isn’t worth covering at all.

Why insurers might adjust rates

Insurance experts note that while vandalism claims typically don’t impact rates as much as collision claims, a sustained increase in claims could lead to rate hikes across the board for Tesla owners.

Given that Teslas are already among the most expensive vehicles to insure—ranking just below brands like Rolls-Royce, Lamborghini, and Bentley—any increase in premiums could make ownership even less affordable.

Beyond insurance concerns, Tesla is struggling with declining sales and plummeting used car values, making it harder for owners hoping to sell their vehicles.

If the pattern holds, some drivers might decide the hassle isn’t worth it. That could accelerate the shift toward other electric brands—or push Tesla to reconsider how its CEO’s public persona affects the company.