Tesla has been hit by the California Insurance Department (CDI) for the systematic denial or delay in customer claims despite years of warnings by the state regulatory authority, according to A new pair of files.
Tesla’s insurance arm, along with the Tesla National Insurance Company, which deals with “voluntary practices of settlement of unfair claims”, including “intense delays in response to the claims of counterparty in all steps” and “irrational refusals”. This allegedly caused “financial damage” and “discomfort to the counterparties”.
The CDI first approached Tesla on these issues in 2022, according to deposits, but claims that things have only worsened. “In 2025, Tesla companies have already made more complaints, more justified complaints, and commit more violations than in the previous three years in combination,” the regulator wrote.
Tesla and the state national could face up to $ 5,000 for each “illegal, unfair or misleading act” and up to $ 10,000 for any “voluntary” act, according to deposits. Companies have 15 days to respond.
The enforcement action could have legal implications for Tesla. In July, the company was hit with a proposed category lawsuit for allegations that the The company deliberately delayed and minimized claim payments. CDI wrote on Friday that Tesla’s actions may have created “possible exposure to third -party responsibility”. Tesla and State National did not respond immediately to a request for comments.
Tesla started its internal insurance product in 2019. The idea was to provide cheaper premiums and faster service. But started a rocky start. The site crashed repeatedly and when it did not do it, it offered excerpts that were away higher than owners are expected. Still, Musk promised to be a “revolutionary” product.
Just three years later, according to CDI’s deposits, the regulator observed a “highlighted upward trend in claims related to claims” against Tesla. Thus, in December 2022, the CDI began to meet Tesla and State National.
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The regulatory authority said he learned that the position of Tesla’s “head of claims” was empty for months. He also accused companies of not reporting the problems of handling the requirements.
As a result, the CDI submitted Tesla and State National in a type of test period: the regulator watched the companies’ efforts to reduce these violations for six months. Tesla and the state national “acknowledged” that they had underestimated the volume of requirements and staffing required to handle them, according to the CDI, and promised to enhance the recruitment.
Tesla needed until April 2023 to hire a new head of claims. Through the rest of the year, Tesla and the state national “reported improvements to the quality” of handling their demands and “resolving consumer complaints”.
Later that year, he published Reuters Research on Tesla’s insurance arm This showed that things were not so rosy.
The CDI came to the same awareness in 2024. The regulator observed a “significant increase” in both Tesla’s complaints and “law violations”, according to deposits. The CDI had only received 83 consumer complaints against Tesla in 2022, but in 2024, that number jumped to 829. In 775 of these cases, the CDI found that Tesla had violated state insurance.
Things have only gotten worse, according to the CDI. Until September 22 of this year, the regulator has received 1,481 complaints against Tesla and has set 1,969 violations of the Insurance Code.
Overall, in 2022, the CDI said Tesla has garnered nearly 3,000 violations of state insurance law. The majority of these violations include Tesla that does not respond to customers within the compulsory period of 15 days. The CDI said it has identified 166 violations in which Tesla filed a “thorough, fair and objective investigation” in a claim.
‘CDI has been notified repeatedly [Tesla] On the issues and violations of the law, “the regulator wrote.” While [Tesla] repeatedly committed to improvements, the number of justified complaints and violations continued to grow, proving [Telsa’s] Inability to correct its practices. ”
