The California Department of Insurance published a press release announcing enforcement actions against Tesla Insurance Services, Inc., Tesla Insurance Company, and State National Insurance Company for repeated violations of the state’s claims handling laws.
Since 2022, the Department has received a large number of complaints against the Tesla Companies and State National related to the handling of automobile claims. The Department warned the companies of the harm done to policyholders, and the companies committed to making improvements, but violations and legitimate consumer complaints persisted.
The Department alleges the companies have engaged following unfair claims settlement practices:
- Unreasonable delays in responding to policyholder claims throughout the entire process
- Unreasonable denials and delays in paying valid claims
- Failure to conduct fair and thorough investigations of claims
- Failure to inform policyholders of their right to have denials reviewed by the Department
The companies could face penalties of up to $5,000 for each unlawful, unfair, or deceptive act, and up to $10,000 for each act deemed to be willful. They could also have their license to transact insurance in the state suspended or revoked by the Insurance Commissioner if it is determined to be against the public interest to continue to allow them to do so.
The companies have 15 days to respond to the Department’s “Accusations” and “Notices of Orders to Show Cause.” The Department asks any past or current policyholder of Tesla Insurance Company or State National Insurance Company who believes their consumer rights were violated to contact the Department.
The press release can be found here.