The electric car industry is booming in the United States and around the world. It is expected that by 2030, more than half of US car sales will be electric. This is in line with the White House's national target for electric vehicles, with combustion-engine vehicles being gradually phased out over the coming years.
If you are planning to purchase an electric car, it is important to understand how to purchase electric car insurance. In this blog post, the experts at Nexus will highlight everything you need to know about electric car insurance cost and more. We will also share useful tips to help you reduce the cost of electric car insurance.
How Much Does Insurance Cost for an Electric Car?
There are so many benefits to purchasing an electric car over a conventional car. These include savings on gas, better performance, and the fact that an electric car is environmentally friendly. However, electric vehicle insurance is typically more expensive than insurance for a conventional car.
To give you an idea of the typical electric auto insurance cost in the United States, below is a list of popular electric vehicles (2022 models) and their average annual EV insurance premium:
- Nissan Leaf - $1,804
- Chevy Bolt ($1830)
- Toyota Prius ($1,740)
- Hyundai Ioniq ($2,402)
- Ford F-150 Lightning ($1,960)
- Audi e-tron ($4,268)
- Polestar 2 ($2,426)
- Tesla Model X ($4,193)
- Tesla Model 3 ($2,612)
- Tesla Model S ($4,066)
- Rivian R1T ($2,989)
Of course, these are just average rates for electric car insurance. Below, we will highlight some of the factors that determine specific electric car insurance cost.
Do Electric Cars Need Insurance?
In a word, yes. Insuring an electric car is the exact same as covering a conventional vehicle. Policies for electric cars will feature the same coverage options as the policies for conventional cars. These include bodily injury, liability, collision, and comprehensive coverages.
Most regional and national auto insurance companies provide general electric car insurance, including Farmers, Allstate, GEICO, Nationwide, Liberty Mutual, USAA, and Progressive.
In the case of Tesla, owners of these vehicles can purchase insurance directly through the mobile app. Some of the pros of this method include that the insurance is tailored to the needs of EV owners, driving data may be used to offer a discount, and there are several optional coverage types available.
Is Insurance Expensive for Electric Cars?
As we have highlighted, electric car insurance rates are typically higher than those for a conventional car. Some of the primary reasons for this are the higher upfront purchase price and the higher repair costs.
On average, electric car insurance cost is approximately 15% higher than insurance for a comparable conventional car. This varies from car to car. For example, with a Volvo XC40 Recharge, there is an electric premium increase of more than 40%, while the premium for a MINI Electric is just 6.5%.
Do Electrical Vehicles Cost More to Insure?
Again, the answer here is (at least for the time being) yes. There are a number of factors that serve to determine electric car insurance cost, which are worth highlighting.
For example, a person's credit score is important as it could be an influencing factor when applying for electric car insurance. While an insurance company won't use a direct credit score, they may reference what is considered an insurance-based credit score.
Another factor is location. This includes a person's state, city, and even ZIP code. Where you park your park at night, such as on the street or in a garage, also plays a role in determining a premium.
Certain states such as New York have typically higher conventional and electric auto insurance premiums, while states such as South Dakota, Idaho, Iowa, North Dakota, Vermont, and Wyoming are considerably more affordable when it comes to conventional and electric vehicle insurance.
Other factors that play a role include prior insurance, driving record, age, gender, and the type of vehicle being insured. As we have highlighted, it typically costs more to insure an electric vehicle compared to a combustion-engined vehicle.
Ways to Reduce the Cost of Car Insurance for Electric Cars
If you are concerned about the potentially high cost of electric vehicle insurance, there are some steps you can take to reduce this. Firstly, certain insurance companies offer lower average premiums for electric cars than others. Below is a breakdown of the average premium for electric cars by some of the largest insurance companies in the US:
- USAA ($1,576)
- State Farm ($1,646)
- Progressive ($1,667)
- GEICO ($1,771)
- Allstate ($2,707)
Tips to lower your electric vehicle insurance cost include:
- Ask insurance companies about available discounts (such as pay-in-full and loyalty)
- Bundle your electric car insurance and home insurance policies with the same company
- Opt for a higher deductible
- Add safety features to your car
- Shop around before renewing with the same company
It's also worth highlighting that while car insurance for electric cars is higher, owners can save significantly when it comes to charging compared to owners of conventional cars. Not having to pay gas prices to charge your car and instead being able to plug in and charge at home will result in significant savings.
Best Car Insurance for Electric Vehicles
When looking for the best electric car insurance rates, we recommend that you shop around to see what each electric car insurance company is offering in terms of premiums and discounts. This approach will help you find the best EV insurance and the fairest electric vehicle insurance rates.
Here at Nexus, we are the best auto transport company in the United States, offering professional auto transport delivery to your front door. To learn more about our services, contact our team today. We look forward to speaking with you.
