Electric Car Insurance

Shopping for an electric vehicle might be an exciting time in your life, but obtaining electric car insurance is typically not. While you’re dreaming about trim levels, color possibilities, and how much money you’ll save by avoiding the gas station, auto insurance is probably the last thing on your mind.

If you’re a first-time EV buyer, you might be surprised to learn that insuring your new battery-powered vehicle costs more than insuring your gas-guzzler – often significantly more.

For example, when Reliableinsurance examined 2023 Tesla car insurance prices, we discovered that the national median premium for a 2023 Tesla Model 3 was $2,574 per year for full coverage. That is about 45% more than the national median cost of car insurance.

High electric car insurance premiums might add financial stress to an already costly purchase. This is what you should know.

Why is electric car insurance so expensive? 

Purchasing insurance for an electric car is identical to that of a gas car. Both typically receive the same types of coverage.

So, why is electric car insurance so expensive? It mainly comes down to costs: 

• Sticker price. Electric vehicles (EVs) are more expensive than gas-powered vehicles, owing to the batteries that power them. While repairing a high-powered gas engine might cost up to $10,000, replacing electric car batteries can cost more than $20,000.
• Specialized repairs. Electric vehicles require specialized repair equipment and mechanics. So, if you require repairs after an accident, you’ll probably have to drive your electric car to an EV-certified facility. 

Higher prices and fewer repair shops result in higher insurance premiums since insurers must spend more money to repair or replace your electric car if it is damaged or stolen. Your insurance company may also be required to pay more for a rental car because your EV may be in the shop for longer than a gas-powered car.

How can I save money on electric car insurance?

Many elements that influence the price of an auto insurance coverage are beyond your control. However, there are a few things you may do to obtain a better price:

• Shop around. Car insurance quotations might vary substantially from one business to another. That’s why shopping around with at least three different companies is frequently the most effective approach to achieve a reduced price.
• Inquire about discounts. Many insurers provide a variety of auto insurance discounts that you may be eligible for – but you never know until you ask. For example, some insurers provide a discount for driving an electric car.
• Increase your deductible. A deductible is the amount you pay upfront before getting a payment from your insurer following an accident. You may usually increase or decrease the deductibles on your policy. A greater deductible results in reduced premiums (more money in your pocket). Simply be prepared to spend extra out of pocket if you ever need to file a claim.
• Pay by the mile. If you don’t plan to drive your new EV frequently, consider pay-per-mile insurance. Pay-per-mile insurance charges a monthly base premium plus a per-mile rate. This could save you a lot of money if you rarely drive (perhaps you work from home or rely heavily on public transportation). Not all firms offer this form of insurance, and those that do may not offer it in your state. 

Where can I get electric car insurance?

Because auto insurance companies do not yet require a particular coverage for EVs, many will be able to provide a price for your electric car.

You may seek rates from insurance companies directly or use Reliableinsurance car insurance comparison tool to get started. Another alternative is to contact an insurance broker or independent agent. Brokers and independent agents consult with numerous insurers to find the best coverage for your needs.

If you own a Tesla, you have an additional option: Tesla Insurance. It is offered to new and existing Tesla owners for both Tesla and non-Tesla vehicles. It calculates a new monthly premium based on drivers’ real-time driving behavior and other considerations. However, Tesla Insurance is not offered in all states.