Why Is Car Insurance for Electric Cars Expensive?

Electric cars (EVs) are often more expensive to insure due to their higher purchasing price, unique and costly features and because of the potential risk they can pose to other drivers. In our research, SmartFinancial discovered that the Chevrolet Bolt EV is one of the least expensive electric vehicles to insure while the Tesla Model S tends to have a higher insurance rate on average.

Learn about the other factors that raise the price of electric car insurance as well as how to get the best price on your auto coverage.

On This Page

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  Why Do Electric Cars Cost More To Insure?

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  How Much Does Electric Car Insurance Cost?

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  Which Electric Vehicles Cost the Most To Insure?

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  Can My EV Help Me Save in Other Ways?

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  How Can I Get the Best Insurance Rates for My Electric Vehicle?

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  FAQs

Why Do Electric Cars Cost More To Insure?

Generally, EVs cost more to insure than gas-powered vehicles due to several factors.

Higher Purchase Cost

Electric vehicles (EVs) tend to be more expensive to buy. The higher initial cost of electric cars translates into higher insurance rates since it would cost the insurance company more money to replace your car if it was totaled in a car accident. To compare, the average cost to buy an EV in July 2023 was $53,469 — 11% higher than the average cost of a gas-powered car at $48,334.^[1]

Part of the high insurance price comes from some of the unique features afforded by some electric vehicles. These features and technology can include self-driving AI controls, reinforced glass windows, quick acceleration speeds, advanced safety features and sensors and built-in gaming consoles depending on the make and model of the vehicle.

Battery Cost

The battery packs for electric vehicles are also very expensive to replace, with costs ranging from $5,000 to $15,000 on average.^[2] That's a hefty sum your insurance company will have to shell out for just one part. Assuming your battery has been damaged due to an accident, the rest of your car is probably not in great shape either, meaning your carrier will have to pay even more to repair your vehicle, or more likely, replace it.

High Likelihood of Being Totaled

Electric vehicles (EVs) have a higher likelihood of being considered totaled after an accident due to the high cost of their battery packs. It may not be possible for batteries to be properly assessed and repaired for many electric vehicles after an accident has occurred.^[3] To be safe, insurance carriers would rather issue a payout for the car being totaled rather than risk the battery being “repaired” and something going wrong down the line.

Limited Technical Support

The number of electric vehicles on the road is growing (over 2 million in 2021) but that does not necessarily mean that every technician knows how to service an electric vehicle.^[4] Learning how to replace an EV battery and troubleshoot sensors takes special training, which of course allows the technician to command higher rates.

In addition, if there is a higher demand for these trained technicians but not enough to go around, the law of supply and demand will also contribute to a price increase for EV repairs. Insurance companies will certainly take all of these factors into account and will likely increase premiums as a result.

Increased Risk To Other Drivers

Insurance companies will factor in the risk your vehicle poses to other drivers. Many electric vehicles can go from zero to 60 miles per hour (MPH) in three seconds which can lead to reckless driving.^[5] Also, consider the fact that an electric car usually weighs 30% more than a gas car and is sometimes physically larger, making it a bigger hazard in case of a collision.^[6] A heavy, fast-moving vehicle can be at a higher risk of causing severe damage and injury to others on the roadway, especially if the other car is smaller than yours.^[7]

How Much Does Electric Car Insurance Cost?

Using in-house data for some of the most popular EVs in the United States (more on these later), the average cost of electric car insurance can range from $130 per month to $312.93 per month. Be aware that this average is based on a limited sample size and is meant to give you an idea of what you may pay for coverage should you purchase an electric vehicle.

The cost of insuring an EV will also be calculated by factoring in your driving record, location, the amount of coverage you choose and a host of other factors.

Are EV’s More Expensive To Insure Than Hybrids?

Electric vehicles tend to be more expensive to insure than hybrids, primarily due to their higher purchase price, the cost of their battery technology and the specialized repairs and parts they often require.

Which Electric Vehicles Cost the Most To Insure?

We’ve gathered in-house insurance data for some of the most popular electric vehicles in the United States according to EV Magazine.^[8]

^{*Data is based on drivers between 40 and 49 years of age. The vehicles listed reflect the most current data available through SmartFinancial. Not all vehicles listed on EV Magazine are present.}

Can My EV Help Me Save in Other Ways?

Electric vehicles can present a financially and environmentally advantageous alternative to traditional gas-powered cars despite carrying higher insurance costs on average. One of the primary benefits of EVs is the lower cost of fuel. Charging an electric car generally incurs less expense than refueling a gasoline vehicle, although this can vary based on factors such as local electricity and gas prices, battery size and state-specific rates.

In addition, EVs tend to have reduced maintenance requirements due to their simpler mechanical design, with fewer parts than gas engines, leading to an average of $330 less in maintenance costs annually.^[9]

EV owners can also take advantage of various government incentives, including tax credits, purchase rebates and exemptions, that can help diverse save on both the cost of purchasing an EV and an EV charger for their homes. EV drivers may also enjoy other perks like access to high-occupancy vehicle (HOV) lanes even if it’s just you in the car.

Electric vehicles are equipped with advanced safety features that can help you build a clean driving record and claims-free history and eventually qualify for a good driver discount if offered by your carrier. For example, adaptive cruise control can help you maintain safe speeds and following distance and blind spot warnings can help you change lanes more safely

How Can I Get the Best Insurance Rates for My Electric Vehicle?

When searching for insurance, it's advisable to obtain three to five estimates from various providers. These companies will need details about you and your vehicle, including the car's year, make and model, your driving history, birth date and driver's license number. Gathering and submitting this information for each insurer can be cumbersome.

Thankfully, utilizing an auto insurance marketplace such as SmartFinancial simplifies this procedure. You only need to complete a single questionnaire regarding your insurance needs and budget. This approach can quickly connect you with a tailored electric car insurance policy, sometimes within minutes. Simply input your zip code below to get your FREE insurance quote.