So you‘ve got your eye on one of the slick new electric vehicles hitting showrooms today. With game-changing performance, high-tech features and potential tax incentives, who can blame you for considering going electric?
But as an auto insurance geek researching the latest vehicle trends, I consistently hear one big question from EV-curious car shoppers: how much more is it going to cost to insure?
I‘m here to give you the inside scoop. In this comprehensive guide, we‘ll analyze how key differences in electric vehicle insurance add to the cost of ownership – and what you can do to keep rates reasonable. Time for some myth-busting and number-crunching!
Why Your EV Will Likely Cost More to Insure
Insurance is all about covering risk. And from an actuarial perspective, insurers currently see electric vehicles as posing a greater financial risk versus regular gas-powered cars. Specifically:
Costlier repairs – EV parts pricing is eye-watering. A replacement battery can run $5,000-$7,000 easy. Sensors, cameras and computers damaged in a crash also quickly escalate repair bills.
Higher total loss frequency – With repair costs climbing past a vehicle‘s worth post-accident, more EV claims end up as total losses for insurers to absorb.
Fire concerns – Though statistically rare, EV battery fires burn extremely hot and are difficult to extinguish. Each fiery incident feeds cautious insurer assumptions.
New technology uncertainty – As cutting edge products, insurers lack long-term data to confidently gauge EV risks versus known quantities like internal combustion cars.
Translating risk into dollars, analysts peg the average EV policy as 15-50% pricier than gas-powered equivalents depending on the company:
Rates also fluctuate based on driver history factors of course. But in general, coverage will set most EV owners back an extra $400-1,000+ each year relative to regular cars.
Now that eye-popping sticker shock out of the way, let‘s explore a few key variables in depth.
EV Model Matters – A Lot
Insurance rates can swing wildly depending on the exact electric vehicle make and model. Why? Predictably, high performance and cutting edge technology equate to high-cost repairs and claims.
Here‘s a comparison of average annual rates for popular electric versus gas model counterparts:
| EV Model | Avg Annual Premium | Gas Equivalent | Avg Annual Premium |
|---|---|---|---|
| Tesla Model S | $2,943 | Mercedes Benz E450 | $2,201 |
| Ford Mustang Mach-E | $2,436 | Ford Edge | $1,568 |
| Audi e-tron | $2,520 | Audi Q5 | $1,788 |
| Polestar 2 | $2,054 | Volvo S60 | $1,568 |
Quicker, flashier and filled with sensors, the EV variants above cost $500-1,400 extra yearly over their dinosaur-fuel-burning counterparts on average.
Now a Nissan Leaf or Chevy Bolt? You can land rates under $1,500 annually – proving small, practical EVs get a friendlier insurance response.
Watch Out Based on Where You Live
If the make and model weren‘t enough variation, your geographical region brings another significant swing factor into insurance rates.
Analysts point to increased claims severity involving costly EVs as the primary driver of regional differences:
In California particularly, big repair bills linked to battery fires and sensor-heavy vehicle frameworks in accidents push premiums skyward. Add in factors like congestion and unfavorable litigation environments and the state lives up to its reputation for eye-watering auto insurance costs – EV or not.
On the flip side, regions with fewer incidents, lower repair labor rates and better claim outcomes help buoy EV rates. Check out states like Ohio and Idaho for saner electric vehicle premiums.
4 Tips to Save on EV Insurance
While electric models commonly trigger higher premiums, you still have options to secure discounts:
1. Compare specialist insurers – Some firms like Travelers and Progressive actively welcome EV owners through customized rates and policy options.
2. Opt for low trims – Pass on extended batteries, sensor packages and performance add-ons that inflate insurer risk models. Stick closer to base model specs.
3. Max out discounts like multi-policy, safe driver programs and bundling coverage when buying from the auto dealer. Every little bit helps whittle away at the EV premium penalty.
4. Self-insure components – For older EVs, accepting high deductibles on expensive parts like batteries and exempting coverage altogether on charging systems and electronics can save substantially if you can stomach the risk. Consult experts to gauge optimal strategy here for your situation.
The Crystal Ball on Future EV Insurance Costs
Given their steep premiums versus gas cars currently, many EV intenders logically ask me: "Yeah but won‘t insurance rates come down eventually as these things go mainstream?"
Excellent question. The fact is analysts rely heavily on predictive models to price risks like emerging technologies. What do the top insurance forecasters see looking ahead?
Positives:
- Broader EV adoption providing more stable actuarial data
- Potential battery tech improvements lowering severity of fires
- Industry repair process learnings reducing claim costs
Negatives:
- Increased frequency of sensor and electronics claims with widespread EV uptake
- Aftermarket unauthorized modifications leading to fiery mishaps
- Ongoing battery constraints keeping replacement part costs high
Balancing the pros and cons, most experts believe electric vehicle insurance costs will only decline slightly over the next 5-7 years as uptake increases before leveling out at 10-40% above gas vehicle rates for the foreseeable future.
Of course I‘ll continue poring over the latest EV insurance developments to keep readers updated on any breaking developments!
The Takeaway: Budget Extra for an Electric Vehicle Policy
Well there you have it – a comprehensive download on why electric vehicles currently cost substantially extra to insure versus regular cars powered by old reliable internal combustion engines.
While flashing some Tesla-esque tech may pump up your monthly payments, my hope is the clarity provided throughout this guide empowers readers to confidently factor insurance into their EV buying calculus.
I‘m always hunting for the latest insider EV intel – so connect if you have any other burning electric vehicle insurance questions!
