Tesla determined to get into the insurance coverage sport again in 2019, and what have you learnt, after a couple of years, stories emerged claiming Tesla’s in-house insurance coverage was sizzling rubbish. Apparently it by no means improved, both, and it is now reached the purpose that the California Division of Insurance coverage is threatening to revoke its license to function within the state. Based on the press launch issued by CDI, Tesla Insurance coverage (working with State Nationwide Insurance coverage Firm, which can also be named within the discover) has “repeatedly failed of their authorized obligations to adequately deal with lots of of California car policyholder claims.”
CDI additionally alleges that Tesla Insurance coverage was “repeatedly warned by the Division of Insurance coverage” that it was violating California regulation however “as a substitute selected to desert their accountability to shoppers and stick with their non-compliant claims-handling practices, putting income above individuals and flouting the regulation with impunity.” So what did Tesla’s insurance coverage division do this was so egregious that CDI felt the necessity to step it? Effectively, it is easy, actually:
The Division’s accusations are primarily based on the businesses’ ongoing systemic failures and willful unfair claims settlement practices together with, however not restricted to, the next alleged violations:
- Egregious delays in responding to policyholder claims in all steps of the claims dealing with course of, inflicting monetary hurt, out-of-pocket bills, potential third-party legal responsibility publicity, and misery to policyholders
- Unreasonable denials and delays in totally paying legitimate claims to shoppers
- Failure to conduct thorough, truthful, and goal investigations of claims, thus denying shoppers the insurance coverage advantages they count on
- Failure to advise policyholders of their rights to have their claims denials reviewed by the Division – a serious client safety in California to verify insurers are held accountable by their regulator
It hasn’t been getting any higher, both, with CDI additionally stating, “In 2025, the Tesla Corporations have already had extra complaints, extra justified complaints, and dedicated extra violations than within the three earlier years mixed.”
Extra violations yearly
Tesla Insurance coverage is an appointed agent for State Nationwide, and as Engadget factors out, between the 2 corporations, the final a number of years have concerned a slew of complaints and alleged violations. In 2022, CDI discovered 21 complaints towards State Nationwide have been justified, whereas additionally discovering that it violated state insurance coverage laws 40 occasions. By means of September 22 of this 12 months, although, these two figures are as much as 415 justified complaints and 1,498 insurance coverage code violations. In the meantime, in 2025, Tesla Insurance coverage has seen an alleged 166 legitimate claims and 532 violations.
Whereas it feels like CDI is fairly fed up with Tesla’s insurance coverage program and is just leaping by means of the ultimate legally-required hoop earlier than bringing down the banhammer, Tesla Insurance coverage does nonetheless have time to make issues proper. CDI is giving Tesla 15 days to resolve these points “in favor of policyholders,” and if it does not, its legal professionals shall be hauled earlier than a choose “to find out whether or not they’ll have the ability to preserve their means to transact insurance coverage enterprise in California in addition to face vital financial penalties.”Â
Although Elon has loads of cash to burn, the penalties for failing to make issues proper can add up rapidly. In California, we’re speaking “as much as $5,000 for every illegal, unfair, or misleading act, or as much as $10,000 for every such act decided to be willful.” And with CDI making statements resembling, “As we speak’s ‘Accusations’ and ‘Notices of Orders to Present Trigger’ allege that the incompetency, untrustworthiness, and misconduct of those corporations represent grounds for the Insurance coverage Commissioner to droop or revoke their licenses and that it will be towards the general public curiosity to proceed to permit these corporations to proceed transacting insurance coverage within the State of California,” count on them to go for the jugular, assuming this case makes it to courtroom.Â
When you have Tesla insurance coverage and imagine you have been handled unfairly, too, there’s nonetheless time to log your criticism. Both name 800-927-4357 or file your criticism on-line with CDI.