Tesla Insurance faces class action over claim delays

A motorist has filed a putative class action against Tesla Insurance Company claiming the 6-year-old company delayed his stolen automobile claim so long that he was forced to purchase a replacement car out of his pocket.

The lawsuit in Los Angeles County Superior Court alleges breach of contract, breach of covenant of good faith and fair dealing, and violations of the Unfair Business Practices Act. Maro Burunsuzyan and David Scott of Law Offices of Maro Burunsuzyan filed the claim on Friday.

"In my 31 years of doing this we've never seen what we've seen with Tesla Insurance - delaying total loss and property damage settlements for months and months," Burunsuzyan said in a phone interview. "They knowingly took on thousands of new policyholders. They're trying to compete with carriers who know what they're doing without the infrastructure of handling claims."

Tesla Insurance representatives did not respond to a request for comment.

The plaintiff, Carlos Magana, says he filed a police report and submitted his stolen vehicle report to Tesla Insurance Services Inc. on Jan. 2 after his 2024 Dodge Ram was stolen. The complaint says that Tesla was required to commence investigation within 15 days of receipt of the claim, accept or deny the claim within 40 days and make a final payment within 30 days after that, or by March 13, 2025.

Magana says Tesla's employees gave him the runaround or, in some cases, nothing at all. He says he was frequently put on hold for up to three hours without ever speaking to a live representative.

He said he was forced to finance the purchase of a replacement vehicle on March 30 - approximately 87 days after the claim was submitted - because Tesla still had not compensated him for his loss.

An adjuster with Tesla issued Magana a total loss offer on April 14, approximately 102 days after Magana filed his claim, but the document had inaccurate information which skewed the valuation, the lawsuit claimed. Magana says he made multiple attempts to contact Tesla representatives but received no response.

More than 187 days have elapsed since the plaintiff filed his claim, and Tesla still has not resolved the matter, the lawsuit said.

The size of the class could stretch into the thousands, according to Burunsuzyan's estimates.

The electric vehicle maker launched Tesla Insurance in 2019 because prospective buyers were walking away from car sales due to high insurance quotes, according to a Reuters report, which said the company operated on a shoestring budget which left a few adjusters inundated with claims. Carlos Magana v. Tesla Insurance Company, et al., 25STCV20622 (L.A. Super. Ct., filed July 11, 2025)