"Tesla's insurance arm, along with its partner State National Insurance Company, engaged in "willful unfair claims settlement practices" including "egregious delays in responding to policyholder claims in all steps" of the process and "unreasonable denials," CDI wrote. This has allegedly caused "financial harm" and "distress to policyholders." CDI first approached Tesla about these issues in 2022, according to the filings, yet it claims things have only gotten worse."
""In 2025, the Tesla Companies have already had more complaints, more justified complaints, and committed more violations than in the three previous years combined," the regulator wrote. Tesla and State National could face penalties up to $5,000 for each "unlawful, unfair, or deceptive act" and up to $10,000 for each "willful" act, according to the filings. The companies have 15 days to respond."
The California Department of Insurance filed an enforcement action alleging Tesla Insurance and partner State National engaged in willful unfair claims settlement practices, including egregious delays and unreasonable denials. The regulator states these practices caused financial harm and distress to policyholders and that CDI first raised concerns in 2022 but says the situation worsened by 2025 with increased and justified complaints. Potential penalties include up to $5,000 per unlawful act and up to $10,000 per willful act, with a 15-day response deadline. The action may increase legal exposure amid a separate proposed class-action lawsuit and follows Tesla's 2019 insurance launch, which had early operational problems.
Read at TechCrunch
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