Tesla faces class action over alleged underpayment of insurance claims in Arizona

Tesla General Insurance is facing a class action lawsuit in Arizona accusing the company of concealing and underpaying uninsured and underinsured motorist (UM/UIM) benefits. The suit, filed November 4, 2025, alleges Tesla violated state law by failing to provide the required written offer to equalize UM/UIM limits with liability limits and by refusing to disclose or stack coverages owed to policyholders.

The lead plaintiff, ICU nurse Athena Boggs, was ‘severely’ injured in a May 2025 car accident after another driver, covered by Progressive with $100,000 in liability limits, ran a red light. Despite medical expenses exceeding $125,000 and 20 weeks of lost income, Tesla allegedly tendered only $25,000 in UIM benefits — far below what the suit claims she was owed under Arizona law.

Her husband, Plaintiff Miiller, originally purchased the auto policy from State National , later transitioned to Tesla General Insurance through a March 2025 “Notice of Non-Renewal and Offer.” The lawsuit contends Tesla failed to issue a mandatory written offer for equalized UM/UIM limits when switching policies.

According to the complaint, Tesla misrepresented coverage amounts, attempted to condition payment on a release waiving future claims, and ignored statutory requirements to inform insureds of their right to stack UIM coverages across two vehicles — coverage that would have totaled $200,000.

The case seeks declaratory relief, policy reformation, and damages for bad faith and misrepresentation, while also challenging Tesla’s broader handling of policy transitions in Arizona, where it insures around 10,500 policyholders.