California Regulators Issue Warning, Threaten to Revoke Tesla Insurance License
SACRAMENTO, CA – california’s Department of Insurance (CDI) has issued a warning and potential enforcement action against Tesla Insurance and its partner, State National Insurance Company, alleging repeated failures to properly handle insurance claims and threatening to revoke their licenses to operate in the state. The action, announced Friday, stems from a notable increase in customer complaints and violations of California insurance regulations.
The CDI claims Tesla Insurance and State National exhibited “repeated failures to comply with long-standing claims handling laws,” alongside “egregious delays” in responding to customers and inadequate investigations of claims.
Complaint numbers regarding State National surged from 97 in 2022 – with 21 deemed justified – to 1,095 complaints received between January 1, 2025 and September 22, 2025, resulting in 415 justified complaints. The CDI resolute State National committed 1,498 violations of the state’s insurance code within that timeframe.
Tesla Insurance itself faced 842 complaints during the same period, with 166 justified, and 532 violations attributed to the company. The CDI also noted a period of instability in Tesla Insurance’s claims leadership, with the Head of Claims position remaining vacant for several months and experiencing frequent 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 penalties include monetary fines of up to $5,000 per unlawful act,or $10,000 per willful act.
