The California Department of Insurance (CDI) has issued enforcement actions against Tesla Insurance (which acts as an agent for State National Insurance Company) and State National itself, alleging widespread failures in claims handling that could lead to license suspension or revocation in California.
Key points
- CDI reports a sharp rise in complaints and violations between 2022 and 2025, with hundreds to thousands of complaints and violations attributed to State National and Tesla Insurance in recent years.
- Accusations include egregious delays in processing claims, failure to conduct fair and objective investigations, and repeated violations of California insurance regulations.
- Specific counts cited by the CDI (covering 2022–2025):
- State National: from 97 complaints in 2022 (21 justified) to 1,095 complaints, 415 justified complaints between Jan 1, 2025 and Sep 22, 2025; CDI alleges 1,498 violations in 2025 alone.
- Tesla Insurance: CDI received 842 complaints in the same 2025 period with 166 justified and 532 alleged violations.
- The CDI also flagged management issues at Tesla Insurance, including an extended vacancy and frequent turnover in the Head of Claims role between April 2023 and May 2025.
- If companies fail to resolve the issues within 15 days of the filing, the matter may go before a judge. Potential penalties include fines up to $5,000 per unlawful or deceptive act and up to $10,000 per act determined to be willful.
What this means
The enforcement action could jeopardize Tesla Insurance’s ability to offer policies in California, a key state for EV adoption. It also highlights regulatory scrutiny of insurer claims practices and possible consumer harm from delays or improper denials.
Sources
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