The Rising Cost of Driving Electric: Navigating Car Insurance in a Changing Market
Gas prices have surged over the last month, climbing from a national average of $2.98 on February 26 to $3.98 on March 26. This increase is prompting some new car buyers to consider hybrid and electric vehicles as alternatives to gas-powered models. However, the potential savings at the pump could be offset by higher insurance costs – electric vehicles typically cost more to insure.
Why Are Electric Cars More Expensive to Insure?
Data indicates that insuring an electric vehicle is, on average, more expensive than insuring a comparable gasoline-powered car. According to recent findings, electric car drivers pay 49% more for coverage annually. This is largely due to the higher price tags associated with EVs, making repairs or replacements more costly. The specialized parts and qualified technicians needed for electric vehicles can contribute to increased insurance premiums.
Shopping Smart: Finding the Best Insurance for Your EV or Hybrid
Despite the higher costs, several strategies can facilitate drivers save on car insurance for electric and hybrid vehicles. Comparison shopping is crucial, as rates vary significantly between providers. Increasing your deductible can also lower premiums, and bundling home and auto insurance often results in discounts.
Top Insurance Providers for Electric and Hybrid Vehicles
Best for Low-Mileage Drivers: Lemonade
Lemonade’s pay-per-mile insurance model is ideal for drivers who don’t travel extensively. They offer discounts specifically for owning an electric or hybrid car, a benefit not commonly found with other pay-per-mile insurers. Lemonade provides coverage for your charger and emergency charging if your battery dies.
Best for Bundling: Travelers
Travelers offers discounts for bundling other types of insurance, such as homeowners or condo insurance, with your auto policy. They also provide discounts for both hybrid and electric cars.
Best for New Electric Cars: Geico
Geico’s new vehicle discount, offering 15% off for cars less than three years old, can be particularly beneficial for new EV owners. A multi-car discount of up to 25% is also available if you insure multiple vehicles with Geico.
Best for Families: State Farm
State Farm provides generous discounts for families, including student drivers and those who complete approved driver education courses. Bundling discounts are also available.
Hybrid Car Insurance: What to Expect
While generally less expensive to insure than fully electric vehicles, hybrid cars still tend to cost $20 to $30 more per month than comparable gas-powered cars. This is due to their higher purchase prices and potentially more expensive or hard-to-discover parts.
Saving on Insurance: Practical Tips
- Raise Your Deductible: Increasing your deductible can significantly lower your premiums.
- Bundle Your Policies: Combining home and auto insurance with the same provider often unlocks substantial discounts.
- Improve Your Credit Score: In most states, a good credit score can lead to lower insurance rates.
Frequently Asked Questions
Is electric car insurance more expensive?
Yes, generally. Electric car insurance tends to be more expensive than gas-powered car insurance due to higher vehicle costs and repair expenses.
Does car insurance cover EV battery replacement?
Yes, if your electric car’s battery is damaged in an accident, your policy will cover the repair or replacement.
Do electric cars require specific insurance?
No, you can insure an electric car with standard car insurance policies.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
