More electric vehicles (EVs) are on the road today than ever, with sales jumping from just 4% of the market in 2020 to 14% in 2022. Whether you want to drive an electric car for the cutting-edge technology, the cost savings, or the environmental benefits, you need to understand some specifics of insuring these kinds of cars.
With the higher cost of electric vehicles, it’s important that you buy adequate insurance coverage to match. So, are electric cars more expensive to insure, and how does an EV auto insurance policy differ from traditional car insurance coverage?
Here’s everything you need to know.
Insurance for electric vehicles: special considerations
First off, you won’t be required to purchase a special electric vehicle auto insurance policy just because you drive an EV. Car insurance coverage is the same whether you have a gas-powered or electric car, and there isn’t any special policy you are mandated to buy outside of your state’s minimum required auto insurance coverage.
Depending on the coverage options you choose and even where you live, EV auto policies will include some combination of:
Liability coverage, including property damage liability and bodily injury liability, that covers others who may be harmed in an accident you cause
Collision coverage, to repair or replace your vehicle if you’re involved in an accident where someone else isn’t the at-fault driver
Comprehensive coverage for other-than-collision damage, such as vandalism, theft or weather-related events
Uninsured motorist/underinsured motorist, in case you’re hit by another driver who doesn’t have auto insurance or whose limits aren’t enough to cover your losses
Personal injury protection (PIP), to cover your medical bills and other expenses from an accident like lost wages or home health care
Medical payments (Medpay) coverage, to help with things like co-pays, medical deductibles, prescriptions, and procedures following an accident
That said, select EV drivers have the option of specialized EV auto insurance policies. This is especially true for drivers of certain Tesla models in select states, who can purchase coverage directly through the manufacturer. This Tesla auto insurance offers many of the same coverage options mentioned above in addition to gap insurance/auto loan protection in some areas.
In the future, carriers may begin offering EV auto insurance policies that also protect the vehicle’s high voltage battery, at-home charging stations, and other charging equipment and parts that aren’t covered by typical policies.
Electric car insurance costs (Hint: They’re higher)
While not always the case, you can usually count on EV insurance premiums being higher than those for conventional, gas-powered vehicles. The actual cost of your coverage will depend on your driving record, age, gender, location, credit history, coverage options chosen, and the vehicle you drive.
There are also some special considerations and features of EVs that can impact your car insurance rates. Here are a few to keep in mind:
Electric vehicles tend to have newer and more updated technology, which can be costly to replace and difficult to source.
While the purchase cost of EVs has been gradually declining, these vehicles are still more expensive on average than comparable gas-powered vehicles. Because of the higher cost of replacement, carriers may charge more for comprehensive and collision coverage.
If your EV is involved in an accident, the high-voltage battery, which powers the electric motor, could be damaged and need replacing. Depending on your vehicle, battery-pack replacement can cost tens of thousands of dollars.
Parts for certain EVs may be limited due to small manufacturing processes. This can make the repair process notably more expensive and result in long delays.
Not all repair shops are equipped to work on EVs, so your vehicle may need to go to a special shop following an accident. This can be more costly for your insurance company.
What about hybrid vehicles?
If you own a hybrid vehicle, you’ll encounter some of the same issues with auto insurance rates as EV owners. Hybrid cars have a high-voltage battery that maintains the charge on the vehicles’ electric motors. Repair and replacement can be expensive, and that cost is reflected in the policyholders’ premiums.
On the other hand, hybrid vehicles like the Toyota Prius are self-charging, so you won’t need to worry about installing a charger at your home.
Tips for insuring your electric vehicle
Do your research before choosing coverage, regardless of the policy you’re trying to buy. Request car insurance quotes from multiple carriers to ensure that you get the best deal.
When shopping around for a car insurance policy for your electric vehicle, keep these things in mind to get the right coverage and snag the right price:
Research and compare insurance providers that specialize in EV coverage; these carriers may have the best network of appraisers, parts suppliers, and body shops if and when you need repair. Some offer EV-related discounts that will save you money. For example, Farmers offers a discount to customers in California who drive electric or hybrid vehicles.
When comparing carriers, ask whether the policy covers battery replacement, home charging stations or loss of use coverage, and if other additional coverages are available. While this isn’t common yet, you may find a carrier that covers accessories and auxiliary costs involved with your electric vehicle.
Be sure to take advantage of rebates, tax credits, discounts, and incentives offered to EV drivers. These might include extra savings for vehicles with autonomous/self-driving or special security features.
Lastly, read your policy terms and conditions carefully so you understand what is and is not covered by your policy. You may want to add supplemental coverage or increase your existing coverage limits to better protect yourself.
Electric vehicles are growing in popularity because of their low emissions and fuel savings. But EVs are still new enough that replacing or repairing them is very costly. Because of this, you should expect to pay more for insurance.
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