Auto Insurance for Electric Cars

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Things to know...
  • Electric cars come with higher insurance premiums than would be the case with traditional vehicle policies
  • The cost of replacing expensive battery packs are a factor with the high insurance premiums
  • Electric cars are considered “green”. Therefore, the vehicles may be eligible for green car discounts

To say electric cars represent the vehicle of the future would be an understatement. Electric cars highlight unique positives traditional fossil fuel-powered vehicles lack. Electric “fueling” saves money and the carbon footprint of the car remains minimal.

In time, as more of these vehicles become popular with consumers, they could replace a significant amount of gas-powered vehicles on the roads. Although relatively new to the market, electric cars have made an impact among a segment of consumers.

One drawback with electric cars would be the cost of insurance. Insuring an electric car could be much more costly than commonly the case with a traditional vehicle. That said, there are always means of saving some money on an auto insurance policy.

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Electric Cars Cost More

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It is not a secret that electric cars cost more to insure than would be the case with a standard car. Drivers may pay about $500 more per year on an electric car’s premium.

The value of an electric car factors into the high insurance premiums.

Electric cars do not exactly come in economy models. The vehicles cost more than $30,000. Any auto insurance company that covers the vehicle under comprehensive or collision insurance assumes a huge financial obligation.

If a $50,000 vehicle suffers $10,000 in depreciation, the remaining valued amount of $40,000 is still high. Those interested in trading in the vehicle for a new one appreciate the high resale value. Insurance companies have other considerations.

Imagine if the car was destroyed in a natural disaster or was stolen or if you totaled the vehicle in an accident. The insurance company would be stuck for the $40,000 settlement. As such, an insurance provider must charge accordingly for coverage.

The more costly the car becomes to replace, the more the insurance premiums will be.

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Repair Costs on Electric Cars Are High

Even minor accidents or mishaps can lead to very costly repairs. Electric cars, in particular, cannot be fixed on the proverbial cheap. Electric vehicles are not built as strong as traditional automobiles, which means collision repair work could be very expensive.

If the battery pack were damaged and needed to be replaced, the price could be $10,000 for the battery system alone. Certain models may come with $15,000 battery packs.

With a $500 deductible, the car owner gets a great deal on costly repair, but the insurance company takes a financial hit. Hence, the cost of an auto insurance policy on an electric car will be priced accordingly.

The future is never fixed; economic conditions are subject to change. The cost of electric cars could very well drop. They may become easier to manufacture and the prices on parts may dip.

When this comes true, insurance prices likely will decrease as well. Until then, those interested in electric cars need to look closely at other ways to save.

Examine Discounts

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Several different discounts exist among the many auto insurance providers. Several discounts may be tailor made for buyers of electric cars. A few of the discounts to look at include:

  • Green and hybrid car
  • New vehicle
  • Anti-theft features
  • Anti-lock brakes

— Green Car

Green and hybrid car discounts support eco-friendly corporate responsibility actions on the part of car insurance company while also helping to stimulate sales of the vehicles.

Those buying electric cars could take advantage of this particular discount and save a nice percentage off their premiums.

— New Car

New cars may be less likely to run into problems on the road, which lowers their accident risk.

Car insurance companies have taken note of this decreased risk and provided a special discount to new car owners.

Drivers taking advantage of deals on brand-new electric cars can also take advantage of this discount from participating insurers.

— Anti-Theft and Anti-Lock Brakes

“Anti” means against and anything against the theft or accidents should be welcomed on a vehicle. An improvement of brake performance and an impediment to theft both protect the investment in a new electric car, two things insurance companies take note of.

Searching for Great Deals

Several other discounts may be available based on age, driving record, professional affiliations and more. Always look for discounts when performing comparison shopping since doing so could cut costs on premiums.

Auto insurance customers must look over all the other benefits and cost-saving measures found in a policy quote. Being diligent may lead to getting the best protection at great rates.

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