Insurance On Electric Cars: What Buyers And Owners Need To Know

There’s perhaps no better time to buy an electric car as the widespread popularity of electric vehicles (EVs) and hybrid-powered cars are becoming more mainstream on the back of increasing automobile competition.

All this competition has meant that soon-to-be buyers and those in the market for a cleaner and more sustainable vehicle have more options to choose from than ever before. With more competitors throwing their hats into the ring, prices for smaller EVs have steadily declined over the last few years, making high-end electric cars accessible to a bigger buyer market.

The days of the gas-powered car are steadily seeing its demise against the backdrop of increasing government tax credits and sustainable legislation support for the growing EV market.

While there are several upsides to purchasing an electric car, new owners are often surprised by the higher cost of insuring their electric car compared to a model with similar features and specifications.

When taking out auto insurance on an electric car, there are several factors new owners will need to consider beforehand, and in the following article, we’re going to give you a snapshot of the basics you need to know if you’re thinking of buying a new electric or hybrid vehicle.

What makes electric car insurance expensive?

When buying a new electric or hybrid car, there is often no difference from regular gas-powered cars when taking out insurance coverage. This may come as a surprise seeing that auto insurance for EVs tend to be slightly higher than regular car coverage.

In the United States, the national average for annual car insurance costs around $2,014 for full coverage, and $622 for minimum coverage according to data by Bankrate. Keep in mind that insurance costs can vary depending on the area where you live, your driving record, your age, and the type of car you own.

Factors that make EV insurance more expensive:

The price of the vehicle: Typically electric and hybrid cars are slightly more expensive than their gas-powered counterparts. This is mainly due to the electric components such as lithium batteries and other advanced software and hardware.

Specialized parts and repair: Another factor that can increase the cost of EV insurance is the hefty number of specialized parts and repairs required on electric cars. While the number of EVs on our roads is growing, not all mechanics may have the skill or components to repair an EV in case of breakdown or accident.

Generally, it’s understandable that higher-priced vehicles may cost more to insure seeing that their repair costs may be more expensive. The same goes for electric and hybrid cars that carry a lot of specialized technology, such as their battery pack, that can cost insurers more to cover and repair in case of damage or collision.

The additional risk of insuring any type of EV model typically has nothing to do with the person driving the car, but more so with the cost factors involved in repairing and fixing a high-end electric car.

What all this means for policyholders, is that insurance companies will drive up costs for coverage in the event of a claim involving an EV or hybrid vehicle, meaning that policyholders will end up having to pay more for the same type of insurance coverage compared to gas-powered cars.

Something to remember is that it’s important to review your policies, this includes car, home, life and health insurance. Keeping policies up to date will ensure you know what you are paying for, and in case of any lifestyle changes, you may need to inform your provider about these changes.

What is the average price for electric car insurance?

Several factors can influence the monthly cost of your vehicle insurance, such as the type of car, your age, where you live, what the car will be used for, how often you make use of the vehicle, or even where it is parked during the day or at night.

These factors are also taken into consideration when insurance companies quote you for an electric or hybrid car, but as mentioned previously, other factors such as high-end technology, specialized mechanics, and parts can increase the liability for the insurance company, which in turn leads to higher monthly premiums.

The national average for car insurance for gas-powered vehicles ranges from $2,014 for full coverage to $622 for basic coverage. In some states, insurance prices are well below the national average, such as Maine (-44%), Ohio (-41%), Vermont (-39%), Idaho (-38%), and Virginia (-34%).

On the contrary, however, insurance costs for electric and hybrid vehicles can range from between $2,152 to $4,725 for the more high-end luxury EVs and hybrid cars according to recent industry data by ValuePenguin.

The same data suggests that the Hyundai Kona crossover SUV is the most affordable to insure, with insurance coverage starting at $2,152, while the Porsche Taycan, an electric sports car, is the most expensive at $4,725.

Even more popular and widely available Tesla…