Shop owners and managers having trouble getting paid for Tesla replacements aren’t imagining things. According to the California Department of Insurance (CDI), Tesla Insurance Company (TIC) has received more than a thousand customer complaints in 2025 alone alleging the insurer mishandled their claims.
The CDI issued enforcement actions against TIC and its subsidiary, State National Insurance Company (SNIC), on October 3. In the documents, the CDI alleges that TIC and SNIC violated the California Insurance Code and harmed consumers.
“The actions allege that, despite being repeatedly warned by the Department of Insurance, the Tesla Companies and State National instead chose to abandon their responsibility to consumers and persist with their non-compliant claims-handling practices, placing profits above people and flouting the law with impunity,” California insurance commissioner Ricardo Lara said in a statement.
The actions say CDI began noticing a “marked uptick in claims-related consumer complaints” about TIC and SNIC around August of 2022. The CDI’s Consumer Services Division met with the insurers in December of that year to discuss the issue.
“Despite their awareness of claims-handling issues, neither [TIC or SNIC] had taken action to inform CDI of the situation, and instead, waited for CDI to observe a drastic increase in consumer complaints,” CDI’s document says.
Meanwhile, consumer complaints kept piling up. The CDI’s document says it received 83 complaints of alleged claims mishandling in 2022, 249 complaints in 2023, 829 complaints in 2024 and as many as 1,481 complaints between January 1 and September 22, 2025. The CDI issued a statement alleging that TIC and SNIC had violated the state’s insurance code and regulations 2,913 times.
These violations allegedly include “suggesting or recommending” a repair shop to a policyholder, even though that policyholder had already selected a shop, failing to either accept or deny a claim within 40 days, or simply not paying the shop or customer at all “within 10 days of receipt of an itemized bill or invoice covering repairs.”
CDI claims that the “high turnover rate” in TIC’s head of claims position strongly contributed to these alleged violations. “At least three different individuals” held the role between April 2023 and May 2025 alone. According to CDI, TIC acknowledged that this turnover and other staff shortage issues contributed to the company’s apparent inability to handle claims properly.
The CDI is asking Lara to revoke TIC and SNIC’s insurance licenses, tell the insurers to stop “engaging in unfair or deceptive method, act or practice” and pay a fine of up to $10,000 per method, act or practice.
