Californiaโข Regulators Issue Warning, Threaten to Revoke Tesla Insurance License
SACRAMENTO, โCA – california’s โDepartmentโ of Insurance (CDI) has issued a warning and โขpotential enforcement action โฃagainst Tesla Insurance and its partner, State National Insurance Company, allegingโ repeated failures to properly handleโค insurance claims and threateningโ to revoke their โlicenses to operate in the state. The action, announcedโค Friday, stems from a notableโ increase โin customer complaints and violations of California insuranceโ regulations.
The CDI claims Tesla Insurance andโค Stateโ National exhibited “repeated failures toโ comply with long-standing claims handlingโ laws,” โalongside “egregious โdelays” in responding to customers and โคinadequate investigations of claims.
Complaint numbers regarding Stateโ National surged from 97 in 2022 – with 21 deemed justified – to 1,095 complaints received between January 1, 2025โค and September 22, 2025, resulting in 415 justified complaints. The โคCDI resolute State National committed 1,498 violations of the state’s insurance code within โคthat timeframe.
Tesla Insurance itself โขfaced 842 complaints โduring theโค same period, with 166 justified, and 532 violations attributed to the company. The CDI โalso notedโฃ a period of instability in Tesla Insurance’s claims leadership, with the Head of โคClaims position remaining โvacant for several months andโ experiencing โขfrequent turnover between April 2023 and may 2025.
tesla Insurance and State National have 15 days to respond to the CDI’s filing. Failure to resolve the identified issues could lead to a judicial review determining whether they can continue offering insurance in California. Potential penaltiesโ include โmonetary fines ofโฃ up to $5,000 per unlawful act,or $10,000 โคper willful act.