- Higher upfront purchase costs and expensive repairs are the primary reasons for the higher premiums.
- Drivers may be eligible for incentives and other discounts to help control insurance costs.
- Electric vehicles (EVs), hybrids, and plug-in hybrids (PHEVs) do not require specialty insurance coverage.
Electric vehicles offer several benefits over their fossil fuel-powered counterparts, but lower insurance rates are not among them. Between an EV’s higher purchase price, advanced technology, and other factors, insurance coverage is noticeably more expensive. While that’s generally a downside for any driver, there are a number of factors that affect insurance costs, some of which can be used to help lower them. Let’s dive in to learn more about EV insurance, why it costs what it does, and what you can do to keep your costs down as much as possible.
Are Electric Cars More Expensive to Insure?
Yes, electric vehicles are generally more expensive to insure than comparable gas models. While insurance premiums for some less expensive models, such as the Chevrolet Bolt, fall below the national average, most EVs are significantly costlier to insure.
That said, car insurance rates can vary wildly between drivers, even for the same vehicle. Insurers base their prices on the driver’s credit score, driving record, age, location, and more, so two people could see very different insurance premiums, regardless of whether they’re insuring an EV or a gas vehicle.
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EV Ownership Costs
Why Electric Cars Often Cost More to Insure
It has less to do with how EVs drive than with what happens after a collision.
- 1
The battery is the bill. Reported Tesla battery pack pricing runs from about $6,000 for a 75-kWh unit to $15,500 for a 100-kWh unit — a repair with no gas-car equivalent.
- 2
Hidden damage means write-offs. Internal battery pack damage is hard to rule out after a crash, so insurers may total a car over a hit that would’ve been a routine fix.
- 3
Few certified techs. Scarce high-voltage training and specialty tooling let qualified shops charge more.
- $5,99975-kWh pack, as reported
- $15,500100-kWh pack, as reported
- 100+ yrsGas-vehicle production head start
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Fewer collision and property damage claims. A 2023 IIHS-HLDI analysis matching EVs to their own gas twins found notably fewer collision and property damage claims.
- ↑
Costlier when they happen. Those property damage claims ran higher in dollar terms.
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Fewer injury claims. Bodily injury and PIP/MedPay claims came in lower as well.
Fewer claims can offset costlier ones — so for some nameplates, EV and gas premiums land close together.
- A
Pricier componentry. Beyond the pack, EVs tend to ship loaded with tech and purpose-built parts.
- B
A luxury-weighted lineup. Affordable options are growing, but much of the EV market is still priced as premium metal.
- C
Scale hasn’t caught up. A century of high-volume gas production has wrung out cost that early, lower-volume EV manufacturing hasn’t yet.
Is It More Expensive to Insure a Tesla?
Tesla vehicles can be more expensive to insure than other vehicles, but the extra cost is largely due to the higher purchase prices some models command. A Tesla Cybertruck can easily exceed $100,000, and all of the automaker’s vehicles come packed with technologies that cost a pretty penny to replace. However, the biggest factor in determining insurance costs for any car is the driver. Insurance companies look at a range of data points to set policy rates, including the driver’s credit history, driving record, age, and more.
EV Ownership Costs
How to Save Money on Electric Car Insurance
Insuring an EV can cost more than a comparable gas car — but four moves can bring the premium back down.
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Shop Around
Compare rates from multiple insurers. Carriers price EV risk very differently, so quotes from several providers reveal who offers the best deal.
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Raise Your Deductible
Your deductible is what you pay out of pocket before coverage applies. Accepting a higher one often lowers your monthly premium.
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Rebates & Incentives
Many states offer EV tax credits or rebates that offset the higher upfront cost. Some utilities also add discounted charging rates.
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Other Discounts
Ask about safe-driving and multipolicy bundling discounts. Your employer may also unlock lower premiums through an affinity program.
Bottom line: Stack a few of these and the EV insurance premium gap narrows fast.
Graphic: Chris Teague
MORE: Our Favorite Electric Car Safety Features and Brands That Offer Them
Do EVs Require Special Insurance?
No. Electric car insurance policies look similar to those written for conventional vehicles. You need liability coverage in case of an accident, as required by state law. You should also consider collision, theft, and uninsured motorist coverage, which can protect you against being on the hook for charges related to other people’s actions. Comprehensive insurance covers damage to your vehicle when it’s not in a crash but is rather affected by events out of your control. Examples include extreme weather, a rodent chewing interior wires, and more.
There are many levels of insurance coverage available. It’s always best to talk to your agent before you buy or lease a vehicle.
Is Special Insurance Required for Hybrid Cars?
According to State Farm Insurance, hybrid cars do not require special insurance.
A spokesperson for the insurer says, “For State Farm customers, there is no difference in insuring an electric or hybrid car compared to insuring a gasoline-powered one. We use the same underwriting guidelines.”
If you use a Level 2 home charger in your garage, carport, or anywhere else, these use a plug similar to dryers or electric ranges. You will not need any additional coverage on your homeowner’s insurance policy.
According to State Farm, “There is no need for additional coverage because of a high-voltage charger in the home.”
However, some underwriters may require photographs or documentation that the home-charging unit has been properly and professionally installed.
MORE: How Much Does It Cost To Charge an Electric Car?
Does Owning an Electric Car Increase My Insurance Risk?
Every electric car on the market today must comply with federal safety standards. Insurance companies have not identified specific liability risks for electric vehicles. Many new EV models have also achieved the Insurance Institute for Highway Safety’s (IIHS) highest crash-test safety scores, including the Hyundai Ioniq 5, Rivian R1S, and others. Strong crash-test performance and generous standard safety equipment tend to help lower insurance costs.
RELATED: Find the Best Electric Car
What Else Should I Consider When Insuring an Electric Car?
It’s always a good idea to talk to your insurance company to find out if there are any incentives or discounts available for EVs with extensive driver-assistance features. Technologies like adaptive cruise control, automatic emergency braking, and forward collision warnings can all help reduce your insurance costs.
Insurers offer other ways to save, including accident forgiveness, multivehicle discounts, vehicle telematics discounts, etc.
MORE: 10 Fastest Electric Cars and What They Cost
Benefits of Driving an Electric Car
Electric car sticker prices and insurance premiums are typically higher than those of gas-powered vehicles, but EVs do have some financial upsides. One distinct benefit of driving an electric car is the lower maintenance costs. Electric motors have fewer moving parts, so EVs require less upkeep for common wear items such as brake pads, and they do not require engine oil or engine air filters.
Beyond the money, EVs do not produce tailpipe emissions during operation, so drivers can feel a little better about their daily commute. Even so, mineral extraction for battery production and other manufacturing processes do generate emissions, so it would be inaccurate to say that EVs are 100% clean from start to finish.
What Is the Downside to Owning Electric Cars?
While there are many upsides to owning an electric vehicle, including no gas costs and less environmental impact, one of the biggest downsides comes when you need it repaired. This includes vehicle crash damage. Your insurance company may suggest repair facilities, but in most cases, it’s best to take the vehicle to the dealer for a thorough inspection and repair.
Factory-authorized repairs are more important because of the electric car’s unique drivetrain. Beyond crash damage, a big concern is if the battery pack becomes compromised.
Because of these considerations, collision coverage on some EVs may be higher than for gas-powered cars. That’s why it’s essential to shop around for car insurance and compare rates for collision coverage before buying an electric vehicle.
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Editor’s Note: This article has been updated since it was originally published. Chantel Wakefield contributed to the original report.