Electric cars have a certain cachet, compared to their old fashioned counterparts, and will certainly appeal to early adopters of new technologies. Even if you can’t quite stretch to a Tesla, Musk competitors are coming into the market all the time.
Given that electric cars are still more expensive to buy, does that mean they are more expensive to insure?
Why Do They Cost More?
The short answer is yes. Electric cars cost about 21% more to insure than similar fueled models, although this is more than offset by much cheaper running costs.
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It may be hard to understand why an electric car should be more expensive to insure. After all, they have many of the same safety features as new models of fueled cars. They also have fewer moving parts to go wrong. Is there any reason why drivers of electric cars should be any riskier than other drivers? Is it fair to make any assumptions about electric car drivers, when there are still relatively few on the road?
The Risks of Electric Cars
There are two simple answers why auto insurance for electric vehicles costs more than for similar fueled makes and models. Neither of them is related to the driver.
First, electric cars are essentially luxury cars and you can spend up to double the price of the conventional model. Insurers are aware it costs them more to replace a luxury car than a regular one, for example, if it is stolen.
Second, the cost of repairing electric cars is much higher. This is because they naturally require special parts and because only trained technicians are able to do these repairs. Both parts and labor will be pricier for electric cars. If they happen to be involved in an accident, the battery pack is particularly expensive to replace.
Answering questions about the high price of insurance, Association of British Insurers repeated these two reasons. It added that, when more people buy electric vehicles, then premiums will be more likely to come down.
High insurance costs may be one reason why many people do not want to buy electric vehicles, but there are many others.
Average Cost of Insurance
What is the average cost of insuring an electric car?
insure.com says the average cost of insuring an electric vehicle in 2019 is $1,812. That average relies on being a good, low risk driver of a new model. As always, the cost of insurance depends on where you reside, because a BMWi3 owner in Michigan can pay two and a half times more than an owner in Maine.
Myev.com says the top five cheapest models of electric vehicle to insure are:
1.Smart EQ ForTwo $1,486
2.Kia Soul EV $1,663
3.Nissan Leaf $1,727
4.Audi e-tron $1,845
5.Chevrolet Bolt EV $1,883
However, if you were to buy the traditional model of Kia Soul, you would pay 13% less for insurance. Or to look at it the other way, you would pay 15% more for the electrified version.
What Kind of Insurance Do I Need?
Every state expects you to have a minimum level of insurance on your vehicle. This is liability insurance, which covers bodily injury or property damage to someone else – a third party – in an accident caused by you.
If you want to be covered, you need collision insurance and personal injury protection. Collision insurance covers repairs to your car and personal injury protection covers medical payments for you or your passengers in an accident. Some states expect you to have uninsured/underinsured motorist cover, in case you are involved in an accident with somebody who has little or no insurance.
Finally, comprehensive insurance covers all losses that are not related to an accident, such as vandalism or theft. If you have just spent a considerable sum on buying an electric car, you definitely want to be covered for those.
How Do I Reduce My Insurance?
The best way to reduce insurance for electric vehicles is the same as it is for other types of vehicle. It is always cheaper to have an unblemished driving record and to drive a relatively late model, safe and reliable vehicle. While you cannot change your age or gender – and it may be hard to move to a cheaper state, you can reduce your premiums in future by not making small claims.