When it comes to electric vehicles, Tesla is one of the biggest brand names. The manufacturer has a reputation for innovative technology and sleek vehicles, but unfortunately for current and future Tesla owners, at least one insurance company has decided that it’s time to raise rates. Here’s everything you need to know about insurance increases for Tesla vehicles, including who’s doing it and how it could affect you.


Why AAA Is Raising Insurance Premiums for Tesla Vehicles


Right now, the only insurance company that has stated it will raise insurance premiums on Tesla vehicles is AAA, but that is a major carrier with a large customer base. How much will insurance premiums go up? AAA says it could be by up to 30 percent in the next few months.


Tesla currently has two vehicles on the market – the Model S, which is a sedan, and the Model X, which is a sports utility vehicle (SUV). AAA is increasing insurance premiums for both, and that’s primarily because of data collected by the Highway Loss Data Institute.


When it came to the Model S, the institute reported that it had a 46 percent higher claims rate than the average for vehicles in its class. And the overall cost with those claims was more than twice as much as the average.


The Model X didn’t fare much better. Compared to other vehicles in its class, it had a 41 percent higher claims rate and the average claim cost was 89 percent higher than the average.


This wasn’t the only data set that AAA used. It checked other data throughout the country and found the same patterns.


Tesla’s Counterpoints Regarding the Safety of its Vehicles


Tesla strongly disagreed with AAA’s decision and the assertion that its vehicles pose a higher insurance risk. One of its biggest critiques was the way its vehicles were classified, as it claims they were each being compared to vehicles that aren’t similar to them. It mentioned that both its Model S and Model X provide faster acceleration than the other vehicles in their classes.


Car classes are typically determined based on size, though. By those standards, the Model S is considered a large luxury vehicle, and the Model X is considered a large luxury SUV.


In fairness, Tesla did also mention that studies done by the National Highway Traffic Safety Administration (NHTSA) determined its vehicles were safer than others, which means not all data regarding Tesla vehicles is bad.


How This Could Affect Your Insurance Premiums


If you have a Tesla vehicle and you’re looking for the cheapest car insurance, you’re probably not going to find it with AAA. But are there less expensive options available, or will other insurance carriers follow suit?


AAA is currently the only insurance company to make a decision on raising insurance premiums for Tesla drivers. Geico and State Farm wouldn’t commit to it yet, although they did each mention that claim frequencies are one aspect of how they set their rates.


Every insurance company has its own calculations and weighs factors differently, which means it’s always a good idea to shop around. This will now be especially true if you have a Tesla.


And what about Tesla’s latest offering, the soon-to-be-released Model 3? It remains to be seen how insurance companies, including AAA, will treat that one. It may be best to take a wait and see approach until more data on that vehicle is available.


Tesla is a pioneer in the automotive industry, especially with its work on driverless cars and its helpful Autopilot feature. But innovation doesn’t necessarily lead to the best deals on car insurance, as premiums depend on claims and repair costs, not how many bells and whistles the car has. A Tesla can be an excellent car, just make sure you're prepared to pay a bit extra for it.


Author's Bio: 

Author Bio: Jeremy loves writing on all things self-improvement, and avidly strives to learn more about all thing finances, education, and tech.