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Everything you need to know about insuring an electric vehicle

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Fuel savings and being more environmentally friendly are just two reasons consumers are choosing to purchase electric vehicles over their gas- and diesel-fueled counterparts. While buying an electric vehicle might have multiple benefits, you might also want to consider some of the differences, like getting electric vehicle insurance compared to buying conventional auto insurance. By understanding how to best insure an electric vehicle, you can not only save money, but ensure you have the correct coverage for your new purchase.

Electric car insurance vs. conventional car insurance

Typically, you will pay more to insure an electric vehicle than a conventional automobile. This is primarily due to the higher electric vehicle purchase price and the fact that electric vehicles generally have higher repair costs, especially those with expensive technology features.

For example, auto insurers know upfront that they will likely pay more to replace an electric vehicle than they would with conventional cars. Similarly, if even a minor accident results in damage to the battery pack of an electric vehicle, the cost to replace this key component may exceed $15,000.

How much does electric car insurance cost?

Although electric vehicles typically cost more to insure than their gas-powered counterparts, Bankrate analyzed premiums for several makes and models using data provided by Quadrant Information Services to provide insight into just how costs are affected when insuring an electric vehicle.

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. The amount you pay for your electric vehicle’s insurance will depend on a variety of individual rating factors.

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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, bodily injury, collision and comprehensive coverages. Most national and regional auto insurers write policies for electric vehicles, according to the Insurance Information Institute (Triple-I), including:

While several major auto insurers have started toeing into the waters of the electric/hybrid vehicle market 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 only writes car insurance policies in Arizona, California, Illinois, Ohio and Texas for all Model 3, Model S, Model X, Model Y and Roadster Tesla owners but has plans to offer coverage throughout the U.S. 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 auto insurance 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 Tesla owners can request an online quote and purchase a policy on the Tesla website by logging into their Tesla account. New owners who order a new Tesla can get a quote when their vehicle’s VIN becomes available in their Tesla account. In Arizona, Illinois, Ohio and Texas, Tesla’s new insurance offering is based on telematics data, rewarding drivers with lower premiums for their safe driving habits. However, it is worth noting that your monthly premium is tied to your Safety Score. If your score goes down, your premium can also increase.

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 based on individual factors. Some Tesla owners may get lower rates with Tesla Insurance, but others may pay more depending on multiple rating factors such as their location, age and driving history.

Tesla also offers discount programs. For example, if you use the autopilot feature, you could save money. Usage-based discounts are available in California but Tesla’s real-time driver behavior monitoring program is standard in Arizona, Illinois, Ohio and Texas.

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, according to the Triple-I.

Also, research local, state and federal programs 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 electric vehicles?

Owning an electric or hybrid vehicle has more benefits than you might think. Here are a few highlights:

  • 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 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 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 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 12 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. Some electric car owners have even reported driving their vehicles 70,000 miles or more on original brake pads.

Bottom line

All indications show the electric car market will continue to grow. They offer an environmentally friendlier way to get from one point to the next, quieter engines and none of the nasty exhaust fumes of conventional vehicles. 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 lowest premium possible, ask agents about discount programs, including discounts specifically for electric vehicles.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. 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 2019 electric vehicle of the following make and model types, commute five days a week and drive 12,000 miles annually:

  • Audi e-tron
  • Hyundai Ioniq
  • Fiat 500c
  • Ford Fusion
  • Ford Focus
  • Jaguar I-PACE
  • smart EQ fortwo prime
  • smart EW fortwo pure
  • Tesla Model 3
  • Tesla Model S
  • Tesla Model X
  • Jaguar I-PACE
  • Toyota Prius

These are sample rates and should only be used for comparative purposes.

Written by
Mariah Posey
Insurance Editor
Mariah Posey is an auto and homeowners insurance writer and editor for Bankrate.com. She aims to make the insurance journey as convenient as possible by keeping the reader at the forefront of her mind in her work.
Edited by
Insurance Editor
Reviewed by
Director of corporate communications, Insurance Information Institute