As of January 2023, Tesla offers insurance in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah and Virginia.

On June 4, 2017, the American Automobile Associationraised insurance rates for Tesla owners following a report from the Highway Loss Data Institute.The report concluded that the Model S crashes 46% more often and is 50% more expensive to repair than comparable vehicles.Similarly, the Model X was concluded to crash 41% more often and to be 89% more expensive to repair than similar vehicles. As a result, AAA raised insurance rates on Tesla cars by 30%.Tesla said that the analysis is "severely flawed and not reflective of reality", however, Tesla failed to provide any contradictory numbers. Shortly thereafter, Russ Rader, the spokesman for the Insurance Institute for Highway Safety, confirmed the AAA's analysis and that "Teslas get into a lot of crashes and are costly to repair afterward". The following year, an analysis of claim frequency and insurance cost data by the Insurance Institute for Highway Safety conducted by financial research provider 24/7 Wall St. found that the Tesla Model S and Model X were the two most expensive vehicles to insure. Musk stated that he expects these insurance rates will greatly decrease once driver-assist and self-driving technology become commonplace.

Starting in October 2017, Tesla partnered with Liberty Mutual Insurance Companyto offer US customers an insurance plan designed specifically for Tesla cars.In August 2019, this partnership was superseded by a partnership with State National Insurance,but was initially only available to Tesla owners in California. In July 2020, Musk, relying on data obtained through the partnership with State National Insurance, announced that Tesla was creating its own "major" insurance company.Tesla claims the insurance uses individual vehicle data to offer personalized pricing.

As of January 2023, Tesla offers insurance in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah and Virginia.