Do electric cars cost more to insure?

The rise of electric vehicles (EVs) has brought many changes to the automotive landscape, from eco-friendly commuting to high-tech innovations. But one question many potential EV owners ask is: Do electric cars cost more to insure? The short answer is: often, yes—but there are nuances.

Why Insurance for Electric Cars Can Be Higher

1. Higher Vehicle Value: Electric cars, especially popular models like Tesla or Audi e-tron, typically cost more upfront than their gasoline counterparts. Insurance premiums are often tied to the car’s value. The higher the cost to replace or repair, the higher the insurance premium.
2. Expensive Repairs: EVs use advanced technology, including batteries and electric drivetrains, which can be costly to repair or replace. Repairs may require specialized technicians, which drives up the labor cost.
3. Limited Parts Availability: Certain EV models have fewer replacement parts readily available. If parts need to be imported, it increases repair costs, leading insurers to charge more.
4. High-Tech Features: Many EVs come equipped with autopilot, advanced sensors, and sophisticated infotainment systems. While these features improve safety, they are expensive to fix if damaged.

Factors That Can Lower Insurance Costs for EVs

While insurance may be higher on average, there are ways it can be more affordable:

• Safety Ratings: EVs often have excellent safety ratings, which can lower premiums.
• Discounts: Some insurers offer discounts for hybrid and electric vehicles.
• Usage-Based Insurance: EV owners who drive less or use telematics devices can benefit from lower premiums.

Comparing EV Insurance to Gasoline Cars

Research indicates that, on average, EV insurance can be 10%–40% higher than traditional cars, depending on the model and location. For example, a Tesla Model 3 may have higher insurance than a BMW 3 Series due to higher repair costs and vehicle value.

However, electric cars often save owners money on fuel, maintenance, and potential tax incentives, partially offsetting higher insurance costs.

Tips to Save on EV Insurance

1. Shop Around: Compare rates from multiple insurers.
2. Bundle Policies: Combine car insurance with home or renters insurance.
3. Increase Deductibles: A higher deductible can lower your premium.
4. Take Advantage of EV Discounts: Some insurers offer incentives specifically for electric vehicles.

Conclusion

Electric cars often cost more to insure due to higher vehicle prices and expensive repairs. However, with careful shopping, discounts, and smart coverage choices, the additional cost can be managed. While insurance may be higher, the overall benefits of driving an EV—including lower fuel costs, reduced maintenance, and environmental impact—make them a compelling choice for many drivers.

For more information on EV insurance and ways to save, visit NerdWallet or Insure.com.