Tesla’s auto insurance arm hit with consumer class action in California

This class‑action lawsuit against Tesla insurance was filed on July 17, 2025, in California. The complaint is that Tesla has a pattern of delaying or minimizing payouts and harming policyholders, including those with non-Tesla vehicles. Besides this, Tesla insurance in California operates through a 3rd party underwriter; and in other states, Tesla just partners with insurance carriers and acts as a managing general agent. In spite of Teslas' sales pitch of having a direct to consumer model, they are anything but direct and, in fact, have many more intermediaries than conventional insurance companies.

Nice.

Shocker

Denying and delaying claims? What do they think this is - health insurance?

Had them cause they were the cheapest, but they’re just awful. Easily wait an hour to speak to a person, and to wait even longer for the correct person.

What is really amazing is they aren't a licensed insurance carrier. They either partner with insurance carriers acting as a managing general agent, and in other instances (California), they provide insurance through a third-party underwriter.

Awesome

Straight from the United Health playbook.

This is a perfect example of why this subreddit exists

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What a huge surprise.

They have an MGA and a couple of licensed insurance carriers at this point.  I believe "Tesla Insurance Services" is the MGA and the licensed insurance companies are "Tesla Insurance Company", "Tesla Property and Casualty", and "Tesla General Insurance". They may use third party administrators for their claims, I'm not sure about that.

This is my surprised face.

They aren’t wrong. They need to be vastly more responsive to calls and claims. It’s the worst right now.

If you haven't learned yet, fElon = scam business. Stay far away.

The bottom line is that Tesla Insurance is anything but direct to consumer.

>deliberately scheming to delay and minimize insurance payouts On brand.

>including with non-tesla vehicles You need to be stupid to give tesla money for anything, but having a non-tesla car and using tesla insurance comes across as a particularly brain dead move to me.

I agree with you. The reason I posted this is because I answered a question that an owner had posted on the Mercedes subreddit. After researching what he was talking about, I learned Tesla does, in fact, offer insurance on non-Tesla vehicles. Apparently, this guy was attracted by their low price. Then, later, when his car was totaled, he'd spend months making two lease payments because Tesla insurance didn't come through for his totaled car.

Indeed. I was at an EV meet-up a week or two ago... I hadn't seen the model3 facelift in person so wanted a closer look. Chatting with the owner here's what i learned: * bought it 6 weeks ago * immediately returned to Tesla to fix "minor" things (rattles, a front-end vibration at speed, etc) * got it back last week * the paint on the rear lettering is already peeling * passenger-side trunk gap is big enough for my pinky to fit... the driver's side is so tight it looks like it's rubbing the paint off. If only there was some sort of automotive industry standard... some sort of Pre Delivery Inspection... smh.

I clicked the link / supported Reuters because Elon Musk hates Reuters for reporting facts about his companies that he didn't want to get out. ;)

Direct to consumer in regards to insurance just means they don't use agents, they let the consumer shop and sign up themselves.

Especially once you know that Tesla doesn't WANT to insure other cars but California doesn't let them restrict their offering to only the Tesla brand.

Goddamn, I wish I could say I was surprised.

But yet the stock is up. Ass stock imo

The stock is up because Wall Street wants it that way. When they decide it's time to move it down, then it will go down. They know exactly what they're doing, and their systems are milking every statement and behavior from Musk, along with every nuance within the public sentiment. They are making boat loads of money, especially during these past 2-years, by playing a contrarian strategy.

Was their insurance arm positioned in a Nazi salute too?

"Electric vehicle maker Tesla's [(TSLA.O), opens new tab](https://www.reuters.com/markets/companies/TSLA.O) auto insurance unit has been hit with a consumer lawsuit in California accusing it of deliberately scheming to delay and minimize insurance payouts, causing some motorists to abandon claims or pay out of pocket." Everyone should have known that was going to happen. I called it out when they announced they were going to start offering insurance. Just look at their track record.

They have been delaying my claim for almost 2 years now. They ask for one request my lawyer gives it to them and then they come up with something else. They keep changing the goal post in order to delay and not pay. My claim is straightforward too. I was hit head on by an uninsured, drunk driver. Totaled my car and put me out of work. Tesla insurance is the worst.

A person with Telsa insurance made an illegal turn and hit me head on while I was on my motorcycle. It has been 10 weeks since they accepted liability and they have not paid anything toward my repairs not to mention my injuriues. I hvae called them multiple times a day every day the the underwriter pretends to not know who I am every time. These people are the scum of the earth.

Do you know the name of the lawfirm? I want to join.

Call the insurance administrator for the state you live in. Also, find out who the #1 guy is at Tesla Insurance and call them.