Everything You Need to Know About Electric Car Insurance

As electric vehicles become more mainstream, understanding insurance costs and options is crucial for prospective owners thinking about making the switch. Unlike traditional gas-powered cars, insuring an EV comes with unique considerations. In this comprehensive guide, we'll explore the ins and outs of electric car insurance, from cost factors to money-saving strategies and everything in between.

How Much Does It Cost to Insure an Electric Vehicle?

The cost of insuring an electric car can vary significantly depending on several factors. On average, electric car insurance premiums are higher than those for conventional gas-powered cars. According to a recent study by ValuePenguin, it costs approximately 20% more, on average, for drivers to insure an electric vehicle than a gas-powered vehicle.

However, it's important to note that your electric car insurance cost can fluctuate based on factors such as the make and model of your EV, your driving record, age, location, and the auto insurance provider you choose. For example, insuring high-end luxury EV models like the Tesla Model X or Rivian R1S might cost significantly more than insuring a more affordable option like a Nissan LEAF or a Chevrolet Bolt EV.

Why Is Electric Vehicle Insurance So Expensive?

Several factors contribute to the higher insurance costs associated with electric vehicles, as opposed to their gas-powered counterparts:

• Higher Repair Costs. Electric vehicles often require specialized equipment and trained technicians for repairs, which can drive up costs compared to traditional vehicles.
• Battery Replacement Expenses. Replacing the battery pack in an electric vehicle can be an expensive endeavor, sometimes costing thousands of dollars.
• Advanced Technology. Electric cars are equipped with cutting-edge technology, such as advanced driver assistance systems (ADAS) and sophisticated electronics, which can be costly to repair or replace if damaged.
• Limited Repair Facilities. As electric vehicles are still relatively new, there are fewer repair shops equipped to handle EV repairs, potentially leading to higher costs.
• Higher Value. Many electric cars, particularly luxury models, have higher price tags than their gasoline-powered counterparts, resulting in higher insurance premiums.

Where to Buy Electric Car Insurance

You can purchase electric car insurance from most car insurance companies, including providers like Geico, Progressive, State Farm, and Allstate. Some insurance companies, like Travelers and Liberty Mutual, even offer specialized EV auto insurance rates that include unique discounts for electric vehicle owners.

When shopping for electric car insurance, it's important to compare quotes from multiple providers and carefully review the coverage options and exclusions. Consider factors such as liability and coverage limits, collision and comprehensive coverage, roadside assistance, and any additional options specific to EVs.

How to Save Money on Electric Vehicle Insurance

While insuring an electric vehicle can be more expensive than traditional cars, there are several strategies that can help you save money when buying insurance:

1. Shop Around. Compare quotes from multiple insurance providers to find the best rate, monthly premium, and coverage options for your needs.
2. Bundle Policies. Many insurers offer discounts for bundling your EV insurance with other policies, such as home insurance or renters insurance.
3. Maintain a Good Driving Record. Keeping a clean driving record free of accidents and violations can help lower your insurance premiums.
4. Increase Your Deductible. Raising your insurance deductible can lower your monthly or annual premiums, but be mindful of the potential out-of-pocket costs you may have to pay in case of an accident or claim.
5. Consider Usage-Based Insurance. Some insurance companies offer usage-based insurance programs that track your driving habits and reward safe driving with lower rates.
6. Take Advantage of Discounts. Many insurers offer discounts for things like safety features, anti-theft devices, low mileage, and good student or defensive driving course discounts.

Tesla Auto Insurance

Tesla, the leading electric vehicle manufacturer, has taken a unique approach to insurance by offering its own in-house insurance program called Tesla Insurance. Currently available in select states, Tesla Insurance is designed specifically for Tesla vehicles, taking into account their advanced safety features and unique repair requirements.

By directly handling claims and repairs without an insurance company middleman, Tesla aims to streamline the process and provide more transparent and competitive insurance for its customers.

However, it's important to note that Tesla's insurance comes with a unique set of rules that affect your insurance rates. Unless you live in California, you'll be required to use your Tesla's built-in telematics system, known as the Tesla Safety Score. This system closely monitors your driving behavior, and your Safety Score becomes the primary factor in determining your insurance rates.

While conventional insurance companies consider various factors like your claims history and driving record, Tesla Insurance relies heavily on your real-time driving performance as assessed by the Safety Score.

The Tesla Safety Score system is designed to encourage safe driving habits, but it also introduces a level of variability and risk. Your insurance rates could fluctuate more frequently based on your recent driving patterns, which could be great for consistently safe EV drivers but challenging for those with occasional lapses.

If you own a Tesla model and live in an area where Tesla Insurance is available, it's worth exploring this option and comparing it with quotes from traditional insurance providers.

Additional Perks of Going Electric

While insurance considerations are essential when thinking about transitioning to electric, the benefits of embracing this eco-friendly technology extend far beyond just the realm of car insurance rates. Electric vehicle drivers enjoy numerous advantages that can improve your overall driving experience and help you contribute to a more sustainable future.

• Lower Operating Costs. One of the most significant advantages of EVs is their lower operating costs compared to gasoline-powered vehicles. With no need for regular oil changes or costly engine maintenance, the average upkeep expenses for electric cars are significantly reduced.
• Environmental Sustainability. By eliminating tailpipe emissions, EVs play a crucial role in reducing greenhouse gas emissions and improving air quality. As the electricity grid continues to transition towards renewable sources, the environmental impact of EVs will further diminish, making them an increasingly sustainable choice for transportation.
• High-Performance Driving Experience. Electric cars aren't just eco-friendly; they're also a blast to drive! With instant torque and smooth acceleration, many EVs provide a unique, responsive, and exhilarating driving experience unmatched by their gas-powered counterparts.
• Quiet and Comfortable Ride. The absence of a traditional internal combustion engine translates into a quieter and more serene driving experience. An electric motor operates with minimal noise and vibration, creating a peaceful cabin environment that can improve your overall comfort during commutes or long journeys.
• The Newest Technology. EVs are at the forefront of automotive innovation, incorporating cutting-edge technologies such as advanced driver assistance systems, automated software updates, and expansive infotainment systems. Driving an EV allows you to experience the latest advancements in the automotive industry, often not seen in conventional cars.

Saving Money on Your EV

While insurance rates may be concerning to some, it’s also important to note that there are a variety of other ways to save money on your electric vehicle that can help offset the higher cost of insurance.

Tax Credits and Other Incentives

Both federal and state governments offer various tax credits and incentives to encourage the adoption of electric vehicles. For example, the federal government currently provides a clean vehicle tax credit of up to $7,500 for the purchase of a qualifying new electric vehicle.

Many states also offer additional incentives, such as rebates, grants, tax credits, reduced registration fees, carpool lane stickers, or other benefits for EVs. These incentives can significantly offset the upfront cost of purchasing an electric vehicle.

Research the available incentives in your state or consult with the electric vehicle experts at EV Life to ensure you're taking full advantage of these cost-saving opportunities.

Other Ways to Save

• The EV Climate Loan from EV Life. When you pre-qualify for a loan for a new or used vehicle, EV Life helps you maximize your federal and state tax credits, rebates, charging discounts, and other incentives you’re eligible for. We then help you apply for all the paperwork with our “turbo tax-style” incentive filing tools. Once we’ve determined every available discount you can get, EV Life will gather all your savings and apply them directly to your loan, reducing your monthly payment and getting you the best rate on your EV purchase.
• Charging at Home. Installing a home charging station can be more cost-effective than relying solely on public charging stations. EV Life can bundle any charging infrastructure rebates you qualify for with your other incentives.
• Utility Discounts. Some utility companies, such as Xcel Energy in Colorado, offer EV rebates, discounted rates, or special EV charging plans for electric vehicle owners.
• Maintenance Savings. Electric cars typically require less maintenance than conventional vehicles, as they have fewer moving parts and don't require oil changes or tune-ups.
• Fuel Savings. While electricity rates vary, the cost of charging an EV is generally much lower than fueling up a gas-powered car, especially if you charge at home during off-peak hours.

By understanding the unique insurance considerations for electric vehicles and exploring these cost-saving strategies, you can make an informed decision about purchasing and owning an EV while minimizing the financial impact.

To find out the best deal on your preferred electric vehicle, get pre-qualified at EV Life and start saving the planet—and your pocketbook.