How much does it cost to insure an electric car?

The electrical vehicle market in the United States is catching fire. Sales of electric vehicles saw a 160% increase in 2021 in comparison to the year prior. 

If you are a new EV owner or considering the purchase of an EV, you may be wondering how insurance companies treat these vehicles. Electric cars are unique in their design, but insuring one of them, as you will see here, is not at all complex.

How much does it cost to insure an electric car?

Electric vehicles are often at the cutting edge of technology. EVs made up 26% of all new vehicle sales in the global automobile market in the first half of 2021 and the cost to repair these is astronomical. They have an expensive battery to power them, a multitude of sensors, and more. 

The cost of car insurance for a given vehicle is going to have a basis in many factors. These factors include, but are not limited to:

• The type of car you drive, including its price
• Trim level, inclusive of extra features such as high-end audio, lane sensors, and more
• Safety features of the vehicle, including autonomous driving capabilities 
• The type of engine, in this case, electric

Another reason it costs more to insure some electric cars is the rareness of these vehicles. Without as much data to go by, it’s hard for insurance companies to price coverage appropriately. Insurance is as individual as you are, and a multitude of variables will impact the premium.

Affordable car insurance is always available no matter what car you drive, it is just a matter of matching with the right insurance company.

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Are electric vehicles cheaper to insure than conventional cars?

You may think that it is cheaper to insure an electric car. After all, there are green credits and perks offered by many states for people who buy EVs. However, electric vehicles are slightly more expensive than traditional vehicles to insure. 

One of the big reasons why EVs are more expensive to insure than traditional vehicles is their price point. These are usually expensive cars. Their battery also carries a high price tag — a replacement cost of, on average, $6,300.

Electric cars are also full of sensors, autonomous driving capabilities, and more. In many cases, these all require replacement instead of repair following damage. The replacement costs drive up the rates.

Who offers insurance for electric cars?

Insurance companies are all-in when it comes to insurance for EVs. All of the major players are quoting EV insurance and trying to meet the needs of clients.

The top insurance companies offering coverage include:

• Allstate
• Farmers
• Progressive
• Liberty Mutual
• Geico

As a consumer, the best thing to do is to compare quotes and coverage offerings from the various insurance companies. You can also make use of auto insurance quoting tools to get quotes instantly.

Do insurance companies offer discounts for electric vehicles?

Discounts for electric vehicle insurance are not common. Car insurance companies price their policies for EVs appropriately based on the replacement cost and anticipated cost of repairs due to their parts.  

That being said, you do have the ability to get several other discounts when shopping for car insurance. Most car insurance companies will offer discounts for a variety of things, including:

• Driving age and positive driving history
• Low mileage use
• Positive student and grade history
• Having a vehicle parked in a garage
• Multi-policy discounts

Most people qualify for at least one of the above discounts, so make sure to ask your insurance agent about them.

Get Savings With Tax Breaks

You can qualify for a tax break for purchasing an electric vehicle. The Internal Revenue Service offers a tax credit for a Qualified Plug-in Electric Drive Motor Vehicle. The credit will vary with the basis of the electric vehicle you purchase, and which manufacturer you purchase from. The credit starts at $7,500 per vehicle with a phase-out happening as the number of sales of a given vehicle surpasses 200,000 units.

Even though there are generally no specific discounts for electric vehicles, you can take advantage of other discounts to lower the insurance costs for your electric vehicle. Premiums will vary from one insurance company to the next, so it pays to compare costs between insurance companies.

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Case Studies: How much does it cost to insure an electric car?

Case Study 1: The Cost Factors

John recently purchased an electric car and was curious about the insurance costs. He contacted several insurance companies and gathered quotes to compare. He discovered that the cost of insuring his electric car was influenced by various factors, including:

• The make and model of the electric car
• The value of the car
• The driver’s age and driving history
• The driver’s location
• The desired coverage options

After careful analysis, John found that while insuring an electric car could be slightly more expensive than insuring a traditional car, it was still possible to find affordable coverage options.

Case Study 2: Insurance Providers and Coverage

Sarah, another electric car owner, decided to explore different insurance providers to find the best coverage for her vehicle. She compared quotes and coverage offerings from various insurance companies, including:

• Allstate
• State Farm
• Progressive
• GEICO
• Liberty Mutual

By conducting thorough research and utilizing auto insurance quoting tools, Sarah was able to find an insurance provider that offered tailored coverage for her electric car.

Case Study 3: Discounts and Tax Breaks

Mark, an environmentally conscious individual, was interested in potential discounts for electric car insurance. Although discounts specifically for electric vehicles were not common, he discovered that insurance companies offered other types of discounts, such as:

• Multi-vehicle discounts
• Good driver discounts
• Safety feature discounts
• Bundling discounts (e.g., combining car and home insurance)

Mark also learned about the tax break offered by the Internal Revenue Service for purchasing an electric vehicle. This tax credit varied based on the vehicle’s basis and the manufacturer, providing potential savings on both the car purchase and insurance costs.

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