Got off the phone from my insurer (Ameriprise via Costco) and there is no fraud or wrong-doing with insuring a vehicle in another State.
You just have a new policy written up for that State, NJ, in order to register the vehicle there.
Lake Tahoe spans two States, California (where Tesla is located and taxes are high) and Nevada (where there is 0% income tax and fees lower). So not all people who reside at "Tahoe" live in CA. We make conscious economic decisions which allow us to pay cash for our vehicles, a Tesla (or two) included, so there are no financing shenanigans either.
For a new Model S (2021) I compared two rates
Nevada ($290) : A standard $1000 deductible comprehensive policy w/o rental for 6 months (garage is $4 more) if you drive 30-35K miles a year (+$20 if you are above that 12.5K typical person).
New Jersey ($940) : Covering the medical treatment of passengers (guess it's a NJ thing) and the above w/o garage. Don't cover passengers medical (up to $250K) then you save $17 in 6 months.
It's a standard Ameriprise / Costco policy ($250K or something) which is the minimums for those who have a multi-million dollar umbrella policy, so it's not the bare minimum, but something like $250K Bodily ($500K each accident), $100K property, $250/$500 for the uninsured motorist and $1000 deductible cost.
I related to both agents (one for my existing policy, and the new NJ policy) what I planned on doing:
* Buying the vehicle
* Picking up in CA and going to grab luggage from NV
* Road trip across the US (CA ... FL and then up north to NJ)
* Staying / traveling for a while
* Then back home
Nevada does not require registration until the vehicle has been in the State for at least 30 days anyhow. All policies written allow you to travel and be covered. For this specific use case, it looks like we'd just have to have the insurance policy written up for NJ so I could register the vehicle ... in NJ.
The "pick up and drive off" usually is covered by the 3-day transit permit to get your vehicle out of State.
To emphasize : this is a tax AVOIDANCE plan, and not a tax EVASION scheme.