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Everything you need to know about insuring an electric vehicle
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Electric vehicles are becoming more popular in the automobile market. In addition to reducing your personal carbon footprint, electric vehicles may also be an economical option for drivers looking to save on gas. Although electric vehicle prices are becoming more competitive, insuring them is still typically slightly more expensive than buying coverage for a gas-powered car. Fortunately, Bankrate's editorial insurance team has analyzed carriers, coverage options and pricing to help you find the best affordable insurance for your electric vehicle.
Why does it cost more to insurance an electric vehicle?
Typically, you will pay more to insure an electric vehicle than a conventional automobile, but not always. This is primarily due to the higher electric vehicle MSRP and the fact that electric vehicles generally have higher repair costs, especially those with expensive technology features. Repairing these vehicles may also be more costly as not all mechanics have the skill sets required to work on electric vehicles.
Fortunately, as electric vehicles become more common, the technology used in these cars is also becoming more efficient and more affordable. For example, The Department of Energy estimates that battery pack costs for electric vehicles are close to 90 percent lower than they were in 2008. As these vehicles become more popular, we may see car insurance costs for electric vehicles get closer to those for combustion engine cars.
How much does electric car insurance cost?
Although electric vehicles typically cost more to insure than their gas-powered counterparts, some models may be more affordable than others. The national average cost of car insurance is $2,014 for full coverage and $622 for minimum coverage. Our data shows that, on average, full coverage insurance for a Chevy Bolt is actually slightly less than the national average. On the other hand, as luxury vehicles, full coverage insurance for a Tesla Model X is more than twice the national average.
Bankrate analyzed premiums for several makes and models using data provided by Quadrant Information Services to provide a point of reference for electric car owners. The following table lists the average minimum and full coverage premiums for some of the most popular electric models. Note that your personal rates may vary significantly based on personal rating factors like your location, age, driving record and credit history.
|Electric vehicle||Average full coverage premium||Average minimum coverage premium|
|Tesla Model 3||$2,577||$605|
|Tesla Model X||$4,364||$803|
|Tesla Model Y||$2,804||$633|
Where can I buy electric car insurance?
Drivers with electric vehicles follow the same steps to obtain car insurance as those with conventional cars. Electric car policies feature the same coverage options, such as liability, bodily injury, collision and comprehensive coverage. Most national and regional auto insurers write policies for electric vehicles.
While most auto insurers will extend auto policies for electric vehicles, you may have a hard time finding discounts for your electric vehicle. While you can expect to save money by avoiding the gas station and possibly pocketing some tax incentives, many insurance providers are not yet offering any discounts for drivers who choose an electric vehicle.
That said, we found a couple who are. Some large carriers, including Travelers and Liberty Mutual, extend exclusive discounts to electric and hybrid car owners.
Tesla owners have a unique option for electric vehicle insurance. They may be able to purchase Tesla Insurance directly through the company's mobile app. It offers all the same standard coverage options you would expect with a national carrier, plus a handful of endorsements that vary by state. One potential endorsement is the Autonomous Vehicle Protection Package. This includes autonomous vehicle owner liability, cyber identity fraud expenses, electronic key replacement and wall charger coverage.
A unique feature of Tesla Insurance is that it uses real-time driving habits and behaviors to rate a driver’s car insurance policy, as tracked by features within the Tesla itself, and could change based on the vehicle’s monthly Safety Score. Drivers are not rated based on car insurance rating factors like age, claims history and credit score. Instead, Tesla does analyze the type of vehicle you drive, where you live, how often and how safely you drive and your selected coverage.
Currently, Tesla Insurance is only available in Arizona, Colorado, Illinois, Maryland, Nevada, Ohio, Oregon, Texas, Utah, and Virginia. It is also available in California but does not base rates off of telematics data in this state. Additionally, if you are a California driver, but do not drive a Tesla, you may still be eligible for a Tesla policy.
How to save on electric car insurance
If you decide to purchase an electric vehicle, you may be able to save on insurance in many of the same ways conventional car owners do. If you already have an electric car and are curious about finding more affordable rates, consider requesting quotes from several providers. You might get a better deal by switching to another company.
You can also take advantage of discounts. Different companies offer different discounts, but some common ones include bundling, good student, claims-free and paperless billing.
If you own an electric vehicle, you may be eligible for savings beyond insurance. Many local, state and federal programs exist that offer rebates or tax credits for having an electric vehicle. For instance, the California Clean Vehicle Rebate Project pays rebates up to $4,000 to Californians who purchase an eligible electric battery vehicle. The federal government offers tax credits up to $7,500 for purchasing certain makes and models of electric cars and SUVs.
What are the benefits of driving an electric vehicle?
Whether owning an electric vehicle is the right choice for you will depend on your personal circumstances, but there are benefits you may want to consider:
- Energy independence: While you must rely on a charging station to recharge your vehicle’s battery, you can say goodbye to gas stations. With a home charging station, you can plug in your automobile when you get home from work and it will be ready to go the next morning. Plus, public charging stations are popping up more frequently all over the country which may make traveling with an electric vehicle easier than ever.
- Lower environmental impact: Electric automobiles produce no tailpipe emissions. While driving an electric car will not eliminate your transportation carbon footprint, it will significantly reduce it. Additionally, hybrid electric vehicle models utilize either gasoline or battery energy and are a popular option for those not quite ready to fully commit to an all-electric car.
- Reduce inhaled emissions: Tailpipe emissions pollute both the environment and your vehicle’s interior to varying degrees, depending on factors such as the type of car you drive and its climate control system. Car emissions contain many dangerous carcinogens, including volatile carbon oxides, organic compounds and particulate matter. An electric car may help you avoid breathing in these emissions.
- Reduce fuel expenses: Typically, fueling an automobile with gasoline or diesel costs more than the electricity expenses of operating an electric vehicle.
- Extended battery life: Reports about electric car battery performance vary widely. However, based on predictive modeling conducted by the National Renewable Energy Laboratory, new technology has extended the life of some types of batteries up to 15 years. And research continues on ways to extend electric car battery life.
- Reduce maintenance expenses: With an electric vehicle, you do not need to worry about regular oil changes or periodically changing incidental parts such as fan belts, gaskets and radiator hoses.
Frequently asked questions
Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Model: To determine cost by vehicle type, we evaluated our base profile with the following vehicles applied: Chevy Bolt, Nissan Leaf, Tesla Model 3, Tesla Model Y, Toyota Prius and Toyota Camry (base).