Electric vehicles (EVs) offer a cost-effective and sustainable alternative to gas-powered cars. These assets have helped them gain popularity in the automotive industry. One crucial aspect to explore before purchasing an EV is how insurance costs compare between electric and conventional internal combustion engine (ICE) vehicles.
When considering a switch to electric, you’ll want to review insurance premiums for EVs, the factors that contribute to them, and how they compare against rates for traditional vehicles so you can make an informed decision about your vehicle and coverage. In this article, we explore how car insurance for EVs and conventional vehicles compare and outline the factors carriers consider when calculating car insurance premiums.
Do EV drivers pay more for auto insurance?
Although carriers once charged higher premiums to insure electric vehicles, current trends indicate that these rates are declining, narrowing the gap between the cost of insurance for electric and traditional vehicles. Studies indicate that car insurance rates for EVs and traditional vehicles may actually be about the same on average. However, this usually depends on the make and model of the car.
For example, insurance for electric vehicles typically includes the same coverage types as gas-powered vehicles, such as liability, comprehensive coverage, collision coverage, personal injury protection, and uninsured motorist coverage. However, since electric cars generally cost more than traditional automobiles, you may want to consider additional coverage to protect your investment, such as gap insurance or new car replacement, which leads to higher premiums.
Why does insurance cost more for some EVs?
Depending on the car, you may pay more to insure your EV than a traditional ICE vehicle because of its battery. The repair and replacement costs for EVs are also higher due to the specialized and expensive parts, particularly the high cost of replacing damaged or compromised batteries. EV batteries cost thousands of dollars to replace compared to hundreds on a traditional ICE vehicle. There also tend to be fewer repair shops staffed and equipped to fix EVs.
What other factors influence car insurance rates?
When you're shopping for car insurance, it's important to remember that carriers take a variety of details and information into account when calculating your premiums, Many factors can influence the cost of car insurance premiums, including:
Driving Record: A driving record with no traffic violations or accidents often leads to lower insurance rates, which shows responsible driving behavior and lowers insurers' risk.
Location: Urban areas with higher traffic congestion and crime rates typically have higher insurance premiums than rural areas because of the heightened risk of accidents and theft.
Age and Gender: Younger or inexperienced drivers and male drivers are likely to have higher insurance rates due to statistically higher accident rates.
Credit Score: Having a good credit score often keeps insurance premiums low, as it is associated with responsible financial behavior, which insurers view as an indicator of lower risk.
Annual Mileage: The more miles driven annually, the higher the risk of accidents, so having lower mileage often results in lower insurance premiums.
Coverage Type and Deductibles: The type and amount of coverage and the chosen deductibles directly impact insurance rates. Comprehensive coverage and lower deductibles typically result in higher premiums.
Occupation: Certain occupations with a lower risk of accidents may receive lower insurance premiums, while high-risk occupations like delivery drivers may face higher rates.
Find the Right Policy for Your Vehicle with SelectQuote
Whether you drive an EV or a traditional ICE vehicle, finding the right auto insurance coverage is essential for your financial security and peace of mind. Luckily, SelectQuote can help you secure the coverage you need, no matter the type of car you drive. Our licensed insurance agents will help you navigate the buying process and get quotes from several of the nation’s most highly trusted carriers in just minutes, allowing you to find the best auto insurance for your budget and needs.
