CALIFORNIA – A class action lawsuit recently filed in California alleges Tesla Insurance Company delayed or denied valid claims for auto damage and total loss.
California residents can get Tesla Insurance for both Tesla and non-Tesla vehicles.
In June 2024, Plaintiff Carlos Magana leased a 2024 RAM Pickup 1500 Quad Cab. Later that year, Magana purchased a Personal Auto Policy from Tesla Insurance underwritten by co-defendant State National Insurance Company.
The policy provided collision and comprehensive coverage for Magana’s vehicle with coverage effective from July 3, 2024, through January 3, 2025.
According to the complaint, Tesla limited liability to the cash value, repair cost or replacement cost of a stolen or damaged vehicle, minus the deductible.
For total theft, Tesla agreed to cover up to $15 per day in transportation costs, capped at $450, starting 48 hours after the theft until the vehicle is returned or paid for.
Theft of Magana’s car
After Magana’s car was stolen on January 2, 2025, he filed a police report and submitted a theft claim to Tesla Insurance.
A Tesla claims adjuster sent him a Proof of Loss form on January 7, which he returned two days later.
Under CCR section 2695.7(b), Tesla had to start investigating by Jan. 17, decide the claim by Feb. 11 and pay by Mar. 13 if approved.
After receiving no updates, Magana contacted the adjuster twice, noting it had been 30 days since filing and he was now paying the rental car himself.
The original adjuster then said a total loss adjuster would be assigned soon, and later sent a 30-day update stating the claim was still under investigation.
Tesla assigned a total loss adjuster but communication remained poor, with calls unanswered and long hold times.
On February 19, nearly a week past Tesla’s deadline, Magana had received no response on his stolen vehicle claim despite multiple follow-ups. Tesla later acknowledged delays and issued a settlement offer with errors, which Magana’s attempts to correct went unanswered.
Tesla delays claim resolution 187 days after submission
Over six months after the claim, Tesla still hadn’t resolved or paid it, which Magana said, caused significant financial and emotional harm, including ongoing payments and rental costs.
Magana seeks class status, damages, restitution, legal costs and a jury trial.
RELATED: CA Supreme Court rules that Ford can’t force customers to arbitrate lemon law disputes
