Is insurance cheaper for electric cars?
That shiny new electric car you bought will cost more to insure — here’s why
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- Insuring an EV might differ from insuring a gas-powered vehicle.
- EVs have high-value batteries and costly electronics.
- Car-buyers should understand the nuances of EV insurance and why it might cost more.
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There are certain nuances to insuring electric vehicles that car shoppers might want to know before they commit.
Electric cars have a lot of similarities to gas-powered cars, but they also bring some distinct differences. Right now, new EVs cost more on average. They have powerful batteries. And they’re more electronic than ever.
All of those factors could play a role in an EV owner’s insurance policy.
What car-owners need to know about the cost of EV insurance
Drivers have a lot to weigh before going electric, like an EV’s range, charging infrastructure, and how it fits into their lifestyle. Variables that influence their auto insurance policy are equally as important, starting with cost.
The latest estimate from NerdWallet said the national average cost of car insurance stands at about $2,148 per year. Meanwhile, the same for EVs is $2,280 annually, according to a Forbes Advisor analysis. That could mean average annual premiums of $1,830 for a Chevrolet Bolt or $4,066 for a Tesla Model S, says financial services company Bankrate.
So why is that? Generally, more-expensive vehicles are more expensive to cover, and most EVs are, right now, have steeper price tags; a new one sold for $58,725 on average in January, according to Kelley Blue Book.
Their batteries are also costly, and high in value. EVs might have less mechanical parts than an internal combustion engine vehicle, but they’re chock-full of expensive electronic components and sensors.
«Those parts can be pricey,» according to insurance provider Progressive. «If the battery pack is damaged, certain safety protocols are often necessary, adding more to the repair bill. Plus, there aren’t as many shops with technicians trained to fix electric vehicles versus traditional vehicles.»
Provider State Farm said an EV battery repair could cost anywhere from $5,000 to $15,000, and would likely require costly, specialized labor.
While collision and property damage liability claims for EVs tend to happen at lower frequencies than with conventional vehicles, according to the Highway Loss Data Institute, the severity of claims tends to be higher. But that’s been lowering over time.
Other savings are important to remember
This is where car-buyers have to weigh an EV’s total cost of ownership, according to agency AAA. Where EV insurance and upfront costs look more than with a gas-powered car, drivers could see substantial fuel and maintenance costs-savings from going electric. They also come with lower repair and tire costs.
One AAA estimate suggests owning an EV costs 60 cents per mile, compared with 75 cents per mile for a medium SUV and 69 cents for a medium sedan.
Understanding auto pricing overall is unsurprisingly top of mind for buyers, Jessica Stafford, SVP of consumer solutions at Cox Automotive, said.
«That’s the biggest question that consumers have holistically,» Stafford said, «and those consumers are asking that about EVs, too: Help me understand the total cost of ownership, help me understand what this looks like, and what happens when I need repairs.»
Electric Car Insurance
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⊸ Car Insurance ⊸ Electric Cars And Vehicles
About insurance for electric cars
An electric car is a vehicle that uses electric power instead of being propelled by gas. It uses an electric motor and battery to operate. You charge the engine using a wall outlet that can be installed in your home or at a public charging station. Insurance for electric vehicles is relatively new. You’ll need it if you want to drive an electric car. Electric vehicles have only been in mass production since 1997 when Toyota introduced the Prius. But the popularity of Tesla and other models has significantly increased the number of electric vehicles on the road today. But even now, not all insurers offer coverage and it is still a niche market.
What is electric car insurance?
Electric car insurance is an insurance policy for vehicles that run on electricity over gas. While the majority of coverage is similar to standard car insurance policies, there are some subtleties to note. For example, you may require additional liability coverage for situations unique to electric vehicles – charging cables, charging stations, and EV battery protection. If you install a charging station at home, you will also need to update your home insurance policy to include the charging station equipment.
How does electric car insurance work?
Insurance for electric cars works the same as other normal policies. You are required to have insurance coverage to drive. You need a minimum of $200,000 in third-party liability. Mandatory coverage also includes accident benefits, direct compensation property damage (DCPD), and uninsured automobile coverage. Drivers can increase their coverage and plan limits. This allows you to customize your insurance. It’s common to add comprehensive or collision coverage. Speak with your insurer about coverage requirements specifically for electric cars.
How get compare electric car insurance quotes
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Factors that affect electric car insurance
Here are some of the top things that can have an impact on your auto insurance for electric vehicles :
- Vehicle type : Costs can be different for fully electric vehicles.
- Retail price : It’s estimated that electric vehicles cost about 20% more than other cars.
- Repair costs : EVs have higher maintenance costs and higher costss of replacement parts. Mechanics with specialized training are required.
- Battery damage : EV car batteries are more prone to damage during a collision, significantly increasing repair costs.
- Fewer options : Policies for electric cars are not offered by all insurers. You may have fewer options, reducing your ability somewhat to comparison shop. However, more insurers are offering it.
How much does car insurance cost for an electric car or EV?
Car insurance on electric vehicles can vary just as much as on other vehicles. You can expect to pay about the same or slightly more for premiums. At ThinkInsure, we’ll help you shop around and assess options. We’ll find you the best policy based on your vehicle, driving history, and protection needs.
Take advantage of the electric car insurance discount
Driving an electric car automatically qualifies you for a discount. You could save up to 10% on your EV insurance discount. Cost savings on your premiums vary by insurer.
Tips to save on insurance for your electric car
Here are some simple tips to help you get lower premiums:
- Choose insurance friendly vehicle features : Install an anti-theft device and choose vehicle safety features that will help lower costs.
- Consider used : Used electric vehicles cost less to purchase. They are reliable and are often more affordable to insure.
- Increase your deductible : Increase your policy deductible to lower your premiums.
- Check out reviews : Some electric vehicles are more expensive to insure than others. Check out reviews to find affordable electric cars to insure.
Types of fully electric cars
Electric cars, which are also referred to as battery electric vehicles (BEV) are fully electric, use rechargeable batteries, and use no gasoline. Popular types of vehicles include :
- Audi e-tron
- BMW i3
- Chevy Bolt
- Chevy Spark
- Nissan LEAF
- Ford Focus Electric
- Hyundai Ioniq Electric
- Hyundai Kona Electric
- Kia Soul
- Mercedes-Benz B-Class
- Tesla Model 3
- Tesla Model S
- Tesla X
- Volkswagen e-Golf
Electric car insurance FAQs
What is the best insurance for electric cars?
The best insurance for electric cars depends on your coverage needs. Insurers have different policy options and discounts. You can get basic or increased coverage. Rates also vary depending on the provider. Compare car insurance quotes to find the best coverage and rates for your electric car.
Do electric cars need insurance?
Yes. You are required to have insurance if you drive an electric vehicle. The process to get a policy is the same. This also applies to hybrid car insurance.
Is insuring an electric car expensive?
Typically, electric cars cost slightly more to insure than other similar vehicles. However, the car you drive is only one of many factors that impact the cost. Review quotes to better understand your options.
Are electric cars cheaper to insure than other cars?
It depends. In general, electric cars can cost more to insure. But, you also need to consider the make and model being compared in addition to other factors.
Does insurance on electric cars cost less?
It can be. It depends on the make and model of vehicles being compared. Review vehicle premiums to identify the best option.
Start a quote or call us to find cheap Ontario car insurance for your electric vehicle.
What is the cheapest electric car to insure?
The Kia Soul EV and Nissan Leaf are regarded as the cheapest electric cars to insure. See a full list of cheapest cars to insure to see more cost saving opportunities.
You’ll save on insurance by driving an electric car
Find affordable coverage for your electric car. We understand your unique EV insurance needs and will help you take advantage of all green vehicle discounts.
Save money on all policies and get the protection you need to drive worry free and reduce your impact on the environment.
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