Everything you need to know about insuring an electric vehicle

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Unlike their conventional siblings, electric vehicles do not depend on combustible engines. Instead, when you pop the hood of an electric car, you see an electric motor, powered by a massive battery pack, often located in the undercarriage of the vehicle.

Car enthusiasts choose electric cars for many reasons. Some buy them because of their environmentally friendly reputation, and other people switch to electric automobiles to save gasoline dollars. But is an electric car right for you? Whatever your reason for considering this option, you should know about how to get an electric vehicle insured.

Electric car insurance vs. conventional car insurance

Robert Anderson invented the first electric car in 1832, but only in recent decades have electric cars become major contenders in the automobile industry. In the past, electric cars could only travel short distances on a single charge – 100 miles or less – and most consumers couldn’t afford the lofty sticker prices. But today, many electric vehicles cost less than $40,000 and some have a range of more than 370 miles on a single charge. Setting up a home charging station costs just $200-$1,000, and you can juice up on the road at pay charging stations from coast to coast.

Typically, electric cars have higher insurance rates than their conventional equivalents.
Coverage for electric vehicles is higher because they cost more than conventional cars, sustain damage more easily and cost more to repair. So, if you total an electric car, the insurer must pay a higher claim compared to the payout for an equivalent conventional automobile. And, if a fender bender damages an electric car’s battery pack, the insurance carrier may have to pay $15,000 or more to replace it.

How much does electric car insurance cost?

Although electric automobiles typically cost more to insure than their gas-guzzling counterparts, we requested quotes on several makes and were pleasantly surprised at the affordable rates we received.

Electric vehicle Average 6-month premium Average annual premium
Audi e-tron $1,260 $2,520
Hyundai Ioniq $891 $1,782
Fiat 500c $732 $1,463
Ford Fusion $837 $1,674
Ford Focus $817 $1,633
Jaguar I-PACE $921 $1,841
smart EQ fortwo prime $779 $1,557
smart EQ fortwo pure $747 $1,494
Tesla Model 3 $1,142 $2,283
Tesla Model S $1,901 $3,802
Tesla Model X $1,662 $3,324
Toyota Prius $870 $1,740

These are just average rates, though. The amount you pay for your electric vehicle’s insurance will depend on a variety of factors, including:

  • Your annual mileage
  • Where you park the vehicle (on the street vs. in a garage)
  • Your driving history
  • Your age (drivers under 25 pay more)
  • Your vehicle’s safety features
  • Your credit score (in some states)
  • The optional coverages you include (e.g., collision, comprehensive)

In other words, insuring an electric vehicle is just like insuring a conventional one. While the car certainly plays a role in your insurance costs, the auto insurance company looks at a bigger picture, which includes you as a driver and your likelihood of getting into an accident. Safer, low-mileage drivers will generally pay much less than people with a driving history that includes accidents and/or traffic tickets.

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Who provides electric car insurance?

Insuring an electric car is no different than covering a conventional vehicle. Electric car policies feature the same coverage options such as liability, collision and comprehensive coverages. Most major insurers write policies for electric vehicles, including:

While several major insurance providers have started toeing into the waters of electrical vehicles by providing guides on the subject (see Allstate, Geico, Farmers and State Farm), you may have a hard time finding discounts for your electrical 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 Insurance

In August 2019, electric vehicle manufacturer Tesla launched Tesla Insurance. Currently, Tesla Insurance only writes car insurance policies in California for all Model 3, Model S, Model X, Model Y and Roadster Tesla owners but has plans to offer coverage throughout the United States. Tesla marketing claims the manufacturer launched the insurance program because of the company’s intimate knowledge of the vehicles’ technology and serviceability.

Tesla Insurance offers the same standard coverage as most other providers, including bodily injury and property damage liability, collision and comprehensive insurance. Tesla also offers an Autonomous Vehicle Protection Package that includes autonomous vehicle owner liability, cyber identity fraud expenses, electronic key replacement and wall charger coverages. Although some insurance providers do not cover autonomous vehicles, the Stevens Institute of Technology report suggests the coverage could create an $81 billion opportunity for the insurance industry by 2025.

Current California Tesla owners can request an online quote and purchase a policy on the Tesla website. New owners who order a new Tesla can get a quote when their vehicle’s VIN becomes available in their Tesla account.

Like most car insurance companies, Tesla Insurance offers multi-policy discounts. The company claims to offer rates to insure Teslas that are 20-30% lower than its competitors, but like all insurance companies, each driver’s final rate will be different. Some Tesla owners may get lower rates with Tesla Insurance, but others may pay more depending on multiple factors such as their location, age and driving history.

Tesla does have discount programs available. If you use the autopilot feature, you could save money. The company will also use data from your car about your driving habits to consider whether you are eligible for safe-driving discounts.

How to save on electric car insurance

If you decide to purchase an electric vehicle, you can save on insurance the same way conventional car owners do: avoid accidents and traffic violations. 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 discount programs. Insurers offer all types of discounts for purchasing multiple policies, insuring more than one vehicle, remaining claims-free and taking a defensive driving course, among many others.

Also, research local, state and federal programs that offer rebates or tax credits. For instance, the California Clean Vehicle Rebate Project pays rebates up to $4,500 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 electric vehicles?

Owning an electric vehicle has more benefits than you might think. Here are just a few.

  • 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.
  • 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 electric car.
  • Reduce inhaled emissions: Tailpipe emissions pollute both the environment and your car’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 can 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 batteries 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 12 to 15 years. And more research is being done all the time to extend 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. Some electric car owners have even reported driving their vehicles 70,000 miles or more on original brake pads.

Bottom line

There is no doubt that electric cars are here to stay. They offer an environmentally friendlier way to get from one point to the next, quieter engines and none of the nasty exhaust fumes. Typically, electric cars require less regular maintenance and can go an astounding number of miles on original parts.

The sticker price of an electric car might set you back a little more, and you may pay slightly higher insurance rates. But you might be surprised. When you take the time to shop around, you can often find rates comparable to many conventional automobile makes and models. To achieve the best premium possible, ask agents about discount programs, including discounts for electric vehicles.

Frequently asked questions

Do electrical vehicles cost more to insure?

Generally, yes. Because these vehicles are pricier to both buy and repair, insurance providers charge their drivers more for coverage. That said, the savings on gas and tax incentives might more than make up for your policy’s extra cost.

Do insurance providers offer discounts for electric vehicles?

While many insurance companies have not yet extended discounts for environmentally friendly vehicles, both Liberty Mutual and Travelers cut a discount for drivers who choose hybrid or electric cars.

Is it harder to insure an electric vehicle?

No. Most insurance companies offer coverage for electric vehicles. In fact, the odds are high that your current insurance provider would underwrite a policy for an electric car should you decide to make the switch.

Written by
Mariah Posey
Insurance Editor
Mariah Posey is an insurance writer and editor for Bankrate.com specializing in auto and home insurance. She aims to make the insurance journey as convenient as possible by keeping the reader at the forefront of her mind in her work. With a background in reporting and feature writing, she has a knack for conducting research, writing factually while incorporating compelling details, and prioritizing story intent. Mariah is originally from New Jersey and holds a bachelor’s degree in journalism from Elon University. Prior to joining the team, she worked as a copyeditor and writing consultant at her alma mater. She has covered topics ranging from news to tech and lifestyle and has a vested interest in producing engaging content for audiences.
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