California's insurance commissioner issued a stern warning to Tesla insurance operations in early October over alleged failures to properly handle customer claims.
What's happening?
According to Courthouse News Service, Ricardo Lara's office issued enforcement actions against Tesla Insurance Services and Tesla Insurance Company. The companies are accused of ignoring repeated warnings about inadequate staffing and putting profits above customer service.
The insurance commissioner's office started tracking increased complaints in August 2022. Despite multiple meetings where Tesla admitted staffing shortfalls and promised improvements, complaints surged again in 2024.
"[The Consumer Services Division's] concerns included, without limitation, consumers' inability to get in contact with [State National] to submit claims or for follow-up, and [its] delays in resolving claims," the department stated in its filing, per the article.
The alleged violations painted a troubling picture. Between July 31, 2024, and September 22, 2025, the companies racked up 396 failures to respond to inquiries within 15 days and 22 failures to accept or deny claims within 40 days. Officials also cited 10 instances of forcing customers to travel unreasonable distances or wait unreasonably long for replacements and repairs.
"[The companies] concede that they have not been able to keep staffing on pace and acknowledge that they are responsible for the staffing shortfall," officials noted.
Tesla in 2025 had more complaints, justified complaints, and violations than the prior three years combined, according to Lara's office.
Why are Tesla's actions concerning?
This development adds to growing concerns about the automaker's customer service across multiple business areas. Tesla faces potential fines up to $5,000 per violation and up to $10,000 for willful acts, per the article. An administrative law judge could also suspend or revoke the company's license to operate in California.
Insurance customers depend on timely claim processing, especially after accidents or vehicle damage. Extended delays leave people without transportation or stuck paying out-of-pocket for repairs they thought insurance would cover.
The staffing shortfalls also raise questions about Tesla's ability to scale its insurance operations alongside its vehicle sales. The company's admission that it repeatedly underestimated staffing needs may suggest systemic planning issues that could affect customers in other states where Tesla Insurance operates.
TCD Picks » Stasher Spotlight
💡Stasher's reusable food storage options make it easy and affordable to live life with less plastic
|
Do you worry about companies having too much of your personal data? Click your choice to see results and speak your mind. |
Absolutely 👍 What's being done about Tesla's actions?
As of October 3, Tesla had 15 days to respond to the accusations. Current or past Tesla Insurance customers who believe their rights were violated can contact California's insurance department at 800-927-4357 or online at insurance.ca.gov.
While this news is concerning for Tesla drivers, it shouldn't discourage anyone from purchasing an electric vehicle. Making your next car an EV would be a great choice for your wallet and for the environment, and researching customer service ratings and insurance options beforehand can help to avoid frustrating delays if and when claims arise.
Join our free newsletter for good news and useful tips, and don't miss this cool list of easy ways to help yourself while helping the planet.
Cool Picks
