Tesla and insurance companies have different views on handling claims for damaged Teslas. On one side of the argument is Tesla CEO Elon Musk, who says the carmaker is planning design and software changes to help bring down repair costs following an accident.

On the other hand, insurance companies prefer to write off the vehicles - specifically low-mileage examples of the Model Y - post-accident and send them off to salvage auctions. They view the EVs as simply too expensive to repair. Reuters reports Musk stated that premiums from third-party insurance providers "in some cases were unreasonably high."

To counter this, Tesla's in-house insurance division has been applying pressure on those providers by offering to drop Tesla owners' rates. In addition, Musk wants "to minimize the cost of repairing a Tesla if it's in a collision" by making those aforementioned design changes.

"It's remarkable how small changes in the design of the bumper (and) providing spare parts needed for collision repair have an enormous effect on the repair cost," Musk said. "Most accidents are actually small - a broken fender or scratched side of the car."

As much as Tesla customers love their cars, one aspect of ownership that's not always discussed enough is the high repair costs. This is not a new issue. A few years ago, many owners faced long repair wait times at Tesla service centers for two key reasons: there were not enough Tesla-trained technicians and mechanics and too few repair centers.

Musk pledged to resolve these issues, and there has been a definite improvement. Despite high repair costs, demand for Tesla vehicles has only increased.

Reuters analyzed over 120 totaled Model Ys and found that a majority had less than 10,000 miles, with retail prices ranging from $60,000 to over $80,000. For insurance companies, the math doesn't add up to repair them once the estimated cost is determined.

For example, one Model Y with front-end damage originally retailed at $61,388 but had an estimated repair cost of $50,388. And that's where Tesla saw an opportunity.

Its in-house insurance affiliate launched in the summer of 2019 and offered supposedly 30% lower rates than competitors. It's clearly catching on. Tesla's CFO said during a recent earnings call that at the end of 2022, Tesla Insurance was selling premiums at an annual rate of $300 million and growing 20% quarterly.

"[This is] faster than the growth in our vehicle business," he added.