What Do You need to Know About Insuring an Electric Car?

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What Do You need to Know About Insuring an Electric Car?

EVs are fast becoming a trend. After all, they are environment-friendly, and you can save bucks on gasoline bills. Here are some numbers to back our words. The International Energy Agency reports a year-on-year 40% increase in sales of EVs. And the year 2019 saw an unbelievable record-breaking 2.1 million global sales of electric vehicles. There were 7.2 million EVs in 2019 as compared to 17,000 in 2010. But a thing bugging you might be in insuring an electric car costly?

 

 

Is Insuring An Electric Car Costlier Than Conventional Car Insurance?

So, is this true? Is insuring an electric car costlier than conventional car insurance?

Also read: Does Car Insurance Cover Natural Disasters- Everything You Need To Know!

Well, sadly, yes. Electric car insurance will cost you more than a conventional one would. Why? Indeed, you do not become a riskier driver by buying an EV. Then why the higher premiums? So, that is because you are a higher liability due to the below-mentioned reasons:

  1. EVs are costlier than gasoline-run cars. So, if you total your car in some accident or a storm, the insurance company will have to pay you more.
  2. These repairs have to be factory-authorized. That is, the parts come from the manufacturer. Also, EV parts are costlier than gasoline car parts, the insurance company expenditure hikes. Say you get your battery damaged due to an accident. The insurance company might have to shell out $15,000 or more for its replacement.
  3. EVs are also more sensitive and get damaged somewhat easier than gasoline cars. Thus, ending up in more claims.

However, another point to consider is that though the prices are high today, they might come down as EVs get more popular and commonplace.

But as for now, these reasons increase your comprehensive and collision coverage premium quite a bit. However, the liability limits are the same as with other cars.

 

 

What Are the Premium Costs For Insuring An Electric Car?

Now that we know why insuring an EV can be costlier, let us see how expensive it is. Thus, below are the 6-month premium costs of a few EVs according to Bankrate:

Name Of The Electric Car 6-Month Premium Cost
Audi E-Tron $486
Chevy Spark $471
Fiat 500 $750
Ford Focus $617
Jaguar I-Pace $775
Mitsubishi i-MiEV $685
Nissan Leaf $713
Tesla Model S $775
Volkswagen E-Golf $748

 

So, these were the premiums for EVs, but let’s dig a bit deeper and find out exactly how much costlier electric car insurance is from gasoline car insurance.

Self Financial conducted a study and uncovered the below-mentioned insights:

  1. Electric vehicle insurance costs approximately $442 more than a gasoline vehicle. Indeed, this is a considerable increase.
  2. To let the difference sink in, here are the approximate annual premium costs of both. A gasoline-powered car costs you $1232 to ensure, while an electric vehicle will make you shell out $1674.
  3. But the annual cost of using a gasoline-powered car is approximately $3356, while for an electric vehicle, it is $2722.
  4. So, let’s do some basic maths, adding both the insurance and running costs of both the vehicle and comparing, we could get the car’s overall price. So, it is $7952 for gasoline and $9406 for an electric vehicle. Clearly, running an electric vehicle costs you $1454 more.

But do not let the fact that electric car insurance is costlier deter you from buying an EV if you want to. EVs are no doubt saviors of the environment. And if you find them convenient, you should go for them.

Also read: Microinsurance: What It Is? Why Is It So Important?

Instead of deterring from buying an EV, you can save on insurance costs. And here is how!

 

 

How Can You Save On Insurance Costs When Buying Electric Car Insurance?

 

#1: Be Wise About Filing A Claim

Before you file a claim, remember that insurance companies will hike your premiums. And these rates will stay hiked till three years. However, the rate increase differs from state to state.

 

#2: Be On The Look Out For Discounts

Insurance companies offer discounts on many aspects of the driver. For example, if he drives safe, makes payment in full, or goes paperless, etc.

These discounts may be small but can add up fast. So, do ask your insurance agent if you are missing out on any of these.

 

#3: You Can Avail Tax Credits

The government wants to incentivize people to use alternative fuel vehicles. Thus you can get tax rebates at local, state, or federal levels for using certain electric vehicles.

For example, California Clean Vehicle Rebate Program gives Californians a tax rebate of $4,500. And the federal government provides $7,500 in tax credits.

 

#4: Shop Around

This is the root mantra for any shopping. If you want a good deal, you have to look for it in various places. And purchase only when you have exhausted a good number of options.

 

#5: Hunt For Rewards

Many insurance companies offer special discounts to people who drive hybrids or EVs. And the rewards can be as high as 5% for a six-month premiums plan. It would help if you searched for such companies.

Using the above strategies, you can help save some bucks and be sustainable with your pocket and the environment.

 

 

In A Nutshell…

Insuring an electric car is typically more expensive than a gasoline-run car. But if you find the higher call of saving the environment more important or you find EVs more comfortable, do choose them. Doing some research on insurance companies and the various ways you can save can help you bring the overall costs down.

Also read: Guide to 6 Major types of Car Insurance Policy

This was whatever you need to know about insuring an electric car. We hope you liked the content. And if you have any doubts, suggestions, or questions, please leave them in the comments box. We are all ears and reply ASAP!