Marissa Hayes is a technical editor and contributing writer. She holds a Bachelor’s Degree in history, and she was the editor of the literary magazine, The Bluestone Review.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Car Insurance Agent

UPDATED: Jul 21, 2021

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The Short of It

  • Tesla telematics, a usage-based insurance program, is a new program currently being developed by Tesla Insurance
  • Tesla Insurance will use data provided by the Tesla Autopilot program to calculate insurance rates
  • The total discount amount available for this program has yet to be released

Have you always wanted a vehicle from Tesla but have been put off from making your purchase because of the insurance costs?

You could be in luck. After Tesla Insurance launches its newest discount, Tesla telematics, affordable auto insurance could help you achieve your dream of driving off into the sunset with your very own Tesla vehicle.

While you can’t go out and secure auto insurance quotes with Tesla telematics just yet, Tesla’s chief financial officer, Zachary Kirkhorn, has announced that Tesla telematics could be available by the end of the year.

Intriguing as that as is, there’s more good news. You don’t have to wait around to sign up with an insurance company that offers a safe driver auto insurance discount. Finding the best auto insurance for your needs and your budget is as simple as clicking a button.

Enter your ZIP code today to receive free quotes from insurance companies in your area.

What is Tesla telematics?

Tesla telematics is a usage-based insurance program that will eventually track and evaluate your driving habits in order to reward your safe driving with a discount on your insurance rates.

Now, usage-based insurance (UBI) programs are not new. In fact, according to the National Association of Insurance Commissioners (NAIC), the first UBI program was created about 10 years by Progressive.

These days, almost every insurance company has a UBI program to offer its clients. Progressive’s leap forward in safe driver technology paved the way for every other insurance company, including Tesla Insurance.

New to the game, Tesla Insurance was created in 2019 in response to the car company’s clients’ outcry over the high insurance costs that came with the purchase of a Tesla vehicle.

The company was able to provide its clients with more affordable rates, and with the creation of Tesla telematics, auto insurance rates could drop even more for Tesla owners who follow safe driving practices.

While the autonomous driving features of Tesla’s vehicles are quite reliable, there will also be room for user error. But of course, there are many conscientious Tesla drivers on the road as well.

With the introduction of Tesla telematics, Tesla Insurance can base rates on the actual driving data and habits of individuals drivers, which could result in fairer rates and great discounts.

Currently, Tesla Insurance is not available in every state; however, the company is working towards expanding its coverage throughout the country before the end of the year.

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How will Tesla telematics work?

The Tesla telematics system will be able to gather driver data through the computer located within the vehicle itself. Tesla’s chief financial officer, Zachary Kirkhorn, says the company will receive this data through Tesla’s Autopilot and Full Self-Driving (FSD) programs.

With the data provided by Tesla’s Autopilot and FSD programs, Tesla Insurance will be in a prime position to assess crash correlations and probabilities for each driver.

In addition, Tesla Insurance would be able to conduct monthly evaluations of customer policies. This will be a dramatic change, as policies typically are evaluated every six months or on an annual basis.

While Telsa telematics is still working on the system, it is an exciting development in the world of insurance. In the near future, real-time driving habits will be reflected in an individual’s insurance rates.

What driving habits will Tesla telematics track?

Until Tesla telematics goes live, the exact information that will be used to evaluate insurance rates is unknown, but the Tesla Autopilot program already collects information on its driver.

Here are the three main types of information that the Tesla Autopilot program currently collects:

  • Information about the devices you use while driving in your Tesla
  • Information about how the vehicle functions
  • Information about your Tesla energy products

The Autopilot program doesn’t just collect data. It can also steer, accelerate, and brake your vehicle automatically within a lane while you’re out and about. Eight surround cameras that provide 360-degree visibility also come with the Autopilot program.

In addition to all that, there’s a forward-facing radar that collects additional information about your vehicle’s surroundings.

It is safe to assume that Tesla will make use of this technology to gather data about your driving techniques, which will help them ascertain how much of a discount to give you.

In short, the more you follow safe driving protocols, the lower your future Tesla insurance rates will be.

Is a Tesla telematics program worth it?

Do all cars have telematics? The answer is no. The Tesla telematics system will only be available in Telsa vehicles.

Since rates for Tesla owners tend to be less costly than with other major insurance companies, it’s not surprising that many Tesla drivers tend to rely on Tesla Insurance for coverage.

If you want to buy auto insurance with Tesla telematics, you will have to wait. Of course, if you already drive a Tesla, you’ll already own the Tesla telematics control unit when Tesla telematics is launched.

The possible discount that you could receive with Tesla telematics is unknown, but it’s still advisable to follow safe driving practices. Driving safe and avoiding accidents can keep your auto rates low even without a Tesla telematics discount.

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Tesla Telematics: What You Need to Know

Telematics technology is a great way to improve your driving habits and, eventually, you will be able to lower your auto insurance rates with Tesla telematics.

The Tesla Autopilot program already collects an incredible amount of driving data, and Tesla has announced that it will mostly use this program to power Tesla telematics, but until this program is officially launched, you’ll have to wait to get your discount.

While no other auto insurance company offers Telsa telematics, you still need to maintain proper auto insurance coverage whenever you’re on the road. You can find great coverage that suits your needs online.

Enter your ZIP code to receive free auto insurance quotes right now.