Electric vehicles and auto insurance
Are you wanting a more sustainable car option? If that’s the case, you’re probably looking into electric vehicles (EVs) as an alternative choice. EVs have become an increasingly hot commodity in the auto industry. In the year 2022, close to a million electric-powered cars were purchased in the US alone.1 But as you research EVs, the information you find may lead you to wonder: Are electric vehicles more expensive to insure?
A wider selection to choose from in the electric vehicle market could make purchasing an EV an appealing choice, but before you trade in your internal combustion engine, don’t forget there are still key details to factor in. With EVs it’s important to be keep in mind how costs, such as your electric car insurance, could impact your budget.
Are electric cars more expensive to insure?
Cost will always be a critical factor to consider when searching for EV car insurance. Regardless of what powers your car, it’s important to find the auto insurance that best fits your needs and budget. With electric cars, it’s helpful to be aware of how EV insurance rates may differ from gas-powered vehicles.
EV insurance rates, like all auto insurance rates, are based on the risks involved in driving your car and the potential costs of repairs for covered damage. But for EVs, there are also specific factors to be aware of that could increase the cost of your insurance. For example, potential repairs to damaged electric vehicles may include higher labor costs, more expensive parts and fewer repair shops willing to work on them, which could increase your coverage rates. Costs could also be dependent on your driving history, place of residence and even your gender. Shopping around for rates that align with your budget can help ensure you purchase the electric auto insurance that works best for you.
How is it different to insure an electric vehicle?
Beyond basic information like cost, you may also be wondering if you need different or additional insurance for electric vehicles. When you’re ready to purchase EV insurance, you’ll be offered the same coverage options as you would for a gas-powered vehicle. These coverage options may include liability coverage, comprehensive coverage, and collision coverage.
Though the options for gas-powered and electric vehicles are the same, it may also be wise to explore additional coverage options because EVs are typically in higher value and can be more expensive to repair. Other coverage options you may want to consider could be New Car Replacement insurance, Original Parts Replacement insurance and gap insurance.
For many, EVs are generally more expensive and can be considered a luxury item. The volume of available electric vehicles is also low when compared to gas-powered vehicle options, especially when it comes to the used car market.
Could the benefits of EVs outweigh insurance costs?
It’s valuable to remember that purchasing an electric vehicle can be a wise lifestyle choice for many people. Though some expenses like electric car insurance must be accounted for, it’s practical to recognize the benefits of EVs and how you could save later. When it comes to your EV, potential increases in insurance rates may be outweighed by benefits like saving on fuel costs, a number of tax credits and even government rebates and other incentives.
If you’re feeling unsure about the potential upfront costs of purchasing an electric vehicle, consider your selection of an EV much like an investment. For many people, gas prices are a major cost and contributor to the stress involved in car ownership. With an electric vehicle however, that’s no longer something you have to worry about. In the long run, your electric car can help decrease your carbon footprint and save on cost.
Ultimately, purchasing an electric vehicle could work for your lifestyle. Though some costs like EV insurance rates may be higher, owning an electric-powered car could help you cut your gas bill and save on other expenses. If you’re on the road to selecting an EV, you can get a quote for car insurance that could work for you today.
