Gas vs. Electric Car Insurance Rates

Is It More Expensive to Insure an Electric Vehicle?

Electric cars are growing in popularity, but is it more expensive to insure them? The cost of insuring an electric car depends on a number of factors, including the policy you choose and the risks involved. E-car insurance policies are typically more expensive than those for traditional gas-powered vehicles, but there are ways to save on your premium. The best way to find the right policy for you is to work with an independent insurance agent who can gather quotes from multiple carriers and discuss your options with you. In the end, many people consider the higher premiums a small price to pay for gas savings and the environmental friendliness of an electric automobile.

Buying an E-vehicle depends on so much more than insurance rates. Once people understand the facts about electric cars and how much money they can save on fuel purchases, they frequently ignore the increased charges on their monthly or annual policy bills. These are the types of important pre-purchase decisions that help you manage your own budget now and down the road. While this matters a lot to private drivers, it is also a considerable point of interest for companies that maintain non-truck fleets. Rental cars, sedan services, and corporations that offer their employees vehicles to use have to carefully factor large-scale insurance costs into their overhead.

Electric Cars vs. Gas Cars in the World of Auto Insurance

For many people, cost factors into their decision about which provider to choose and how much coverage to get, especially in states like New Jersey that require minimal automobile insurance. Carriers consider a wide variety of factors when figuring out your premium and other best options. When considering car insurance for electric cars and gas cars alike, they look at your driving experience, past record, and age. However, there is less historical data available for electric vehicle claims than for other categories—like high-performance sports cars, large pickup trucks, gas-powered sedans, or compact cars.

Although they are becoming more popular, electric vehicles simply have not been around for a very long time. It is only in the past few years that they have become viable options for everyday drivers across the country. The resulting lack of data means it is much more difficult for insurance carriers to assess risk trends and make policy decisions based on these factors.

The insurance industry as a whole predicts possible risks based on past data. The policy provider uses this information to make predictions about your accident potential or how likely your car is to be stolen. Your policy premium directly relates to these data-driven predictions, factoring in things like the possibility of recovery, repair costs, and replacement prices. With electric auto insurance, all of these things become less assured or stable. The lack of data makes projections more difficult.

Will electrical vehicle insurance rates come down in the future? As more people opt for these efficient and eco-friendly vehicles, it makes sense that costs across the board will drop. Not only will there be more providers offering specific policies for EVs, but things like repairs and replacement, in general, will become more affordable. Also, insurance companies will have the opportunity to collect more data that helps create more accurate projections. This minimizes risk, which they can pass along to their customers through lowered premiums.

Top Brand Electric Car Insurance Rates

When it comes to car insurance, the prices of electric vs. gas vehicles depend on the same factors as policy prices in general. Of course, if you opt for more coverage, you will have to pay more every month. More expensive cars tend to have these types of accounts, but that is not always the case when it comes to electrical vehicle insurance. People who purchase pricier vehicles like Teslas or Porsches expect higher policy costs. They also tend to opt for more coverage, which increases prices even more.

These recent premium averages across the United States may give some insight into the range of costs associated with insuring different brands of electric cars. [1]

These prices are not only a bit higher than gas-powered vehicles, but they also outpace hybrids to a certain degree. For many owners, these cost differences should be taken into consideration when it comes time to purchase their next vehicle.

Why Is It More Expensive to Insure an Electric Car?

Electric cars are becoming increasingly popular, but they come with a unique set of insurance challenges. Because they are still relatively new technology, insurers do not have a lot of data to help them assess the risk of insuring an electric car. This lack of data means that insurers have to charge higher rates to cover their potential losses.

Another factor that contributes to the higher cost of electric car insurance is the fact that these vehicles often suffer from more extensive damage than traditional gasoline-powered cars. This is due in part to the delicate nature of the batteries and electrical components. As a result, repairs can be very expensive, and insurers must account for this increased risk when setting rates.

Finally, electric cars tend to be more expensive to replace than their gasoline-powered counterparts. This is because they are still relatively rare and there is not a large used market for them. As they become more commonplace, this issue will begin to disappear.

How Can You Save on Electric Car Insurance?

Electric car insurance rates can be high, but there are ways to save. One way to save is by opting for less coverage. Talk to your New Jersey independent insurance agent about what level of coverage you need and whether you can get a discount for insuring an electric car. You might be surprised about savings based on theft statistics—E-vehicles are actually less likely to get stolen than their gas-powered counterparts. Whether thieves find them more difficult to start or the vehicles do not break down to salable parts as easily, the existing data about low risk may translate into insurance premium savings for you.

All the usual ways to save on car insurance in NJ also apply to electric vehicle owners. It is not unusual to find special options or offers associated with a variety of driver and car factors. Keep your credit report clean and have a trustworthy bill-paying history. Consider bundling different policies such as home, renters, and car together in one bill. Another way to save is to be a good driver. Keep your driving record clean and avoid accidents to get the best rates. If you attend high school or college, you may benefit from good student discounts for high grades.

Owners of e-vehicles may get financial benefits from state and federal tax incentives, too. While this does not translate into lower monthly or annual insurance rates, it is another way to save on the overall cost of owning a fuel-efficient vehicle. Research carefully, as not all makes and models qualify.

Will Fuel Savings and Other Benefits Outweigh EV Insurance Costs?

Most likely. Other than a desire to help protect the environment and reduce pollution, people choose electric vehicles because they cost less to operate over time. Instead of filling up your tank multiple times a week with expensive gasoline, you use much more affordable electricity to get where you need to go.

Of course, these things depend on current gas and electric kilowatt-hour prices in your area, but there is truly no comparison between the two power sources when it comes to dollars and cents. The US Department of Energy offers a free cost calculator to help you find specific information. Batteries tend to last longer in electric cars, too. Repair costs might be higher, but they are also less frequent in general. You never have to schedule and pay for regular oil changes, radiator hoses, fuel filters, gaskets, or fan belts. There are so many ongoing savings opportunities that it makes sense to accept slightly higher insurance costs instead.

In the end, electric car insurance cost depends on a wide variety of factors. You will pay a different amount depending on the make and model you choose, your driving record, location, age, and other standard metrics. The best way to see all your options and choose a policy that fits your specific needs is to work with an independent insurance agent. And remember, while premiums may be higher than for gas-powered cars, you can rest assured that your electric vehicle will almost certainly save you money on expensive fuel costs over time.

Why Work with a New Jersey Independent Insurance Agent?

In order to get the protection you need and deserve, you’ll want to work with a trusted expert. And who could be better for the job than a local agent who shares your ZIP Code? New Jersey Trusted Choice independent insurance agents take the time to discuss exactly how much coverage is necessary for your individual needs.

Independent agents act as your own personal insurance shoppers, offering you more options than one-policy companies. With just one call, they’ll start gathering multiple quotes for you to review so you can be sure you get the right coverage at the right price.

And, because they’re your dedicated agent, they’re not just there at the beginning, but there to help walk you through the claims process and make sure you’re getting the benefits you're entitled to should an event occur.