How does owning an electric vehicle affect your auto insurance

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Susan Meyer

Senior Editorial Manager

  • Licensed Insurance Agent — Property and Casualty

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebr…

Electric vehicles and hybrids are a growing trend both in the U.S. and worldwide. The global electric car market is expected to expand to $354.80 billion by 2028

The Zebra recently surveyed Americans and learned that nearly 60% have considered buying an electric vehicle or hybrid, and 1 in 5 have considered going fully electric.

But as more and more people are considering a fuel alternative vehicle, it’s worth asking: How does owning an electric vehicle impact your auto insurance?

EV insurance costs more

In our survey, the most frequently cited reason people would choose an EV — even more than its environmental impact — was reducing the amount spent on gas. In fact, 3 out 4 people cited that as a motivator.

And while electric vehicles do usually involve cost savings in fuel costs, the upfront cost to purchase and — by extension — the cost to insure are higher. This makes sense from the perspective of the insurance company, as they will be footing a larger bill to replace your vehicle in the event that it's totaled. Additionally, while electric vehicles usually have fewer moving parts than traditional gas-powered vehicles, when one of these parts becomes damaged it can also be more expensive to repair or replace, upping the cost of the claim. For this reason, EVs in accidents are more likely to be declared totaled by the insurance company. 

Of course, the amount to insure will vary significantly depending on the model of electric vehicle you choose. For example, The Zebra’s 2022 State of Insurance Report found that the average cost to insure the comparatively cheap compact 2022 Nissan Leaf (MSRP $27,400) was $1,870. However, the cost to insure a Tesla Model X (MSRP $114,990) was $3,613 on average.

Costs may come down as technology improves

Above, we mentioned one of the reasons insurance is higher for EVs is because the cost to repair is higher. This is in part because of the newness of the technology, which makes damaged parts difficult and more expensive to repair. However, as EVs’ popularity grows, these costs may go down. The number of repair shops that service EVs is increasing. And the cost of electric vehicle parts is getting less expensive. 

For example, the battery is one of the biggest differentiators between an EV and a gas-powered car. The cost to replace a battery damaged in a loss can be steep. However, as these costs are decreasing, it will eventually result in lower premiums as well.

Insurance options for EVs and hybrid vehicles

Generally your insurance options for an EV or hybrid will be largely the same as with a traditional gas-powered vehicle. However, if you own a Tesla and live in Arizona, California, Colorado, Illinois, Ohio, Oregon, Texas or Virginia you can be covered by Tesla Insurance, which (with the exception of in California) uses real-time driving behavior to determine your car insurance rate.

For other carriers, you can compare the best rates for EV and hybrid models here. Not many carriers offer insurance discounts specifically for EVs and hybrids; however, here are a few to look at: 

Wrapping up

From reduced fuel costs to easier maintenance, there are many ways EVs can provide a cost savings; however, insurance will likely not be one of them. It’s worth factoring in as you consider the cost of ownership of your next vehicle.