Tesla’s auto insurance options in California are under threat as the California Department of Insurance issued enforcement actions against Tesla Insurance for violating claims handling laws and causing delays in responding to customer claims. State National Insurance Company, which Tesla acts as an agent for, is also named in the legal notice.

The CDI received 97 complaints about State National in 2022, with 21 justified complaints and 40 violations of insurance regulations. Complaints skyrocketed over time, reaching 1,095 complaints, 415 justified complaints between January 1, 2025, and September 22, 2025, and 1,498 violations of the state’s insurance code within this year’s complaints.

Tesla Insurance faced 842 complaints, with 166 justified in the same period, and was accused of committing 532 violations of insurance regulations. The agency also highlighted the frequent turnover in the Head of Claims position between April 2023 and May 2025.

Tesla Insurance and State National have 15 days to respond to the CDI’s filing, or they risk being reviewed by a judge to determine if they can continue offering insurance in California. Monetary penalties of up to $5,000 for each unlawful, unfair, or deceptive act, or up to $10,000 for each willful act, are also possible.

Read more at Yahoo Finance: California regulators threaten to revoke Tesla’s insurance license for mishandling claims