Tesla Insurance Must Face Class Action Suit, Judge Rules

Suit alleges Tesla ‘false’ crash warnings inflated premiums.

Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content
  • 10+ years in insurance and personal finance content

  • 30+ years in media, PR, and content creation

Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.

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John Leach
Edited byJohn Leach
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John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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Published December 11, 2023 at 4:00 PM PST | Reading time: 1 minutes

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A class-action lawsuit against EV giant Tesla, challenging its car insurance product, can move forward, an Alameda County Superior Court judge has ruled.

Illinois resident Ricky Stephens filed the lawsuit in April on behalf of Tesla owners who also have Tesla insurance in states where Tesla sells coverage. The suit charges that false or incorrect collision warnings from the vehicles’ sensors created inaccurate safety scores that pushed up insurance premiums.

Tesla insurance

Tesla launched its telematics-based insurance program in 2019 and currently sells coverage to Tesla owners in Arizona, California, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah, and Virginia. Tesla’s insurance product relies on real-time driving behavior data, gathered by technology already in place in all Model S, Model 3, Model X, and Model Y vehicles.

Tesla says premiums are based on the vehicle, location, miles driven, selected coverages, and the vehicle’s monthly safety score, which assesses driving behavior based on several metrics.

Lawsuit allegations

The lawsuit charges that Tesla overcharged drivers by factoring false crash warnings into the safety score that determines premiums. Reuters reported that the complaint states many Tesla drivers have said they experienced forward-collision warnings when no danger was apparent.

The false warnings lower safety scores and lead to higher insurance premiums, the lawsuit stated. Because the safety score can change from month to month, Tesla insurance premiums can also change on a monthly basis.

The lawsuit seeks restitution, profit information, and an injunction against false advertising, Reuters reported.

What’s next

Judge Brad Seligman rejected a motion by Tesla Insurance to dismiss the lawsuit, paving the way for the class action to move forward in the California court system. An initial hearing is scheduled for January.


Evelyn Pimplaskar
Evelyn PimplaskarEditor-in-Chief, Director of Content

Evelyn Pimplaskar is Insurify’s director of content. With 30-plus years in content creation – including 10 years specializing in personal finance – Evelyn’s done everything from covering volatile local elections as a beat reporter to building fintech content libraries from the ground up.

Before joining Insurify, she was editor-in-chief at Credible, where she launched and developed the lending marketplace’s media partnership’s content initiative and managed the restructuring of the editorial team to enhance content production efficiency. Formerly, as tax editor for Credit Karma, Evelyn built a library of more than 300 educational articles on federal and state taxes, achieving triple-digit year-over-year growth in e-files from organic search.

Her early career included work as a content marketer, vice president and managing officer of a boutique public relations agency, chief copy editor for 14 weekly Forbes publications, reporting for large and mid-sized daily newspapers, and freelancing for the Associated Press.

Evelyn is passionate about creating personal finance content that distills complex topics into relatable, easy-to-understand stories. She believes great content helps empower readers with the information they need to make important personal finance decisions.

John Leach
Edited byJohn LeachSenior Insurance Copy Editor
Photo of an Insurify author
John LeachSenior Insurance Copy Editor
  • Licensed property and casualty insurance agent

  • 8+ years editing experience

John leads Insurify’s copy desk, helping ensure the accuracy and readability of Insurify’s content. He’s a licensed agent specializing in home and car insurance topics.

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