When you find a new Tesla Model Y a couple of states away, the lower price point makes it seem like you’re about to bank $4,000. You’ve already had a buddy who lives nearby check the battery, condition, and low mileage, so you think everything is ready to go.
The trouble is electric car insurance. There can be extreme pricing differences between the Tesla you want and the insurance you’ll get. No two EVs will have the same car insurance, but there are some things you can do to lower your premiums so the savings from buying online translate into your actual purchase budget.
Why Electric Car Insurance Costs Should Be Part of Your Buying Decision
Car insurance for electric cars carries the same liability, collision, and comprehensive coverage as a fuel-injected Toyota or GMC. The difference lies in what an insurer will replace after an accident or when a mechanic accidentally damages a part.
On average, an EV costs about $330 less to maintain than a gas-powered car. The trouble with insurers usually comes from a battery replacement, finding a mechanic they approve of in a rural area, and getting hold of repair parts. That can cause the total price of EV insurance to be slightly higher.
Before you buy an EV, get the VIN (vehicle identification number) from the dealer and ask your car insurance provider for a quote. That will give you a much better idea of what you’ll be paying when you figure out a final budget.
What Makes Some Electric Cars More Expensive to Insure?
The good news is there is no “EV surcharge” for car insurance on electric cars. The biggest factors impacting how much you’ll pay have nothing to do with the EV at all. It’s more where you live, your age, driving history, and type of work you do.
All things being equal, there are other factors specific to the EV that can change the insurance quote. Those include:
- Vehicle Value: How much the cost of the EV is when you buy it and its current market value for replacement.
- Battery Costs: An EV’s biggest expense is its battery. The insurer needs to know the costs of repairing, replacing, and diagnosing issues with the battery.
- Specialized Parts & Repairs: The distance to the closest repair shop qualified for your EV model and availability of parts.
- Technology: The sensors, cameras, driver assistance models, and other tech that may make repairs more expensive or complicated.
The final two factors you can play with a little to lower your costs are coverage and deductible. It comes down to how much risk you want to take on for coverage and how much you’re willing to pay in the event of damage.
What to Compare in EV Insurance Before Choosing the Vehicle
You have a significant advantage when selecting EV insurance at the point of purchase. Before you sign any contracts or put down a deposit, you can shop around for providers that work with the make, model, and trim of EV you want. That can be a big difference when you’re comparing popular models like the Chevy Equinox EV or Hyundai IONIQ 5.
Try to use the same factors in your comparison. Those may include:
- Who is driving the EV
- Where you live
- The annual miles you expect to put on it
- Liability limits
- Collision and comprehensive coverage
- Deductible you’re willing to cover
- Any additional coverage (rental, gap, etc.)
You should also check with your state’s car insurance guidelines. Somewhere like Maine has a 50/100/25 minimum, while in California it’s 30/60/15 for specific models. Those numbers refer to the:
- Maximum payout for bodily injury to one person in an accident
- Maximum total payout for all injuries per accident
- Maximum payout for property damage belonging to others per accident
That’s just for liability. Other parts of your car insurance will vary, so double-checking ahead of time helps you select the most appropriate plan with your EV and location. Most providers will do this for you, but more knowledge gives you more power in negotiations.
Average Annual Insurance Premiums by Electric Vehicle Model
Electric Vehicle Model |
Average Annual Premium |
Percentage Difference Compared to Gas Cars* |
|---|---|---|
Nissan Leaf |
~$2,396 |
~15% lower |
Tesla Model 3 |
~$4,296 |
~53% higher |
Hyundai Ioniq 6 |
~$2,929 |
~4% higher |
Rivian R1S |
~$5,724 |
~104% higher |
Ford F-150 Lightning |
~$3,228 |
~4% higher than gas F-150 |
Please note these averages were calculated at the time of writing this article. Actual prices you’ll receive will vary.
Practical Ways to Lower Electric Car Insurance Costs
1. Get Several EV Insurance Quotes
The most important step in getting a lower EV insurance rate is to compare quotes. Use the suggestions already covered and go with the option that is both low-priced and fits your coverage and monthly budget expectations.
2. Ask About EV & Alternative-Fuel Discounts
Both manufacturers and many local and state municipalities are pushing EVs. That puts pressure on insurance companies to offer discounts for EVs, hybrids, and other alternative-fuel vehicles.
Ask the companies whether they offer any EV-specific discounts, especially for your make and model.
3. Bundle Your Policies
You may have the option to bundle homeowners, renters, motorcycle, boat, and other insurance with your car insurance for electric cars. You can compare the bundled total to just your car insurance to see if it’s worth it.
4. Consider Usage-Based or Low-Mileage Insurance
If you only use your EV about 25 miles a day, you have a lower risk profile than someone who does a marketing job between Dallas and Orlando. In addition, you might be able to download a “telematics program” into your EV. That allows the provider to monitor your usage. The safer you drive, the less you pay.
5. Compare Higher Deductibles
Always look at your deductible like a sliding scale. You can often reduce your monthly premium by increasing your deductible 20% to 50%. You’ll want to consider if you can manage covering that deductible during a collision claim, but it may be worth it over the lifespan of your EV.
6. Requote Your EV Insurance Periodically
It’s perfectly acceptable to requote your electric car insurance from time to time. Something you committed to during your car purchase may not be the best choice a few years later. You should reassess if your quote is still the best on the market about every 6 months. That tends to be the lifecycle of most insurance plans.
Don't Forget About Insurance While Your EV Is Being Shipped
The total cost of buying your EV is the vehicle price, plus taxes, registration, insurance, and shipping. That is the cost you’ll need to budget for upfront. You also need to look at your future monthly expenses. You don’t want to purchase “more car” than you can afford or overinsure for what you don’t need.
When you do find that perfect Hyundai or Toyota EV, don’t forget the cost to ship it home. Some EVs have special instructions for loading/unloading with a carrier, so choose the team that offers a fair market price for car shipping and experienced coordination for your specific vehicle.
A good starting point is Nexus Auto Transport. With over 500,000 successful door-to-door deliveries and a massive network of vetted carriers, you’ll get reliable delivery for your new EV. Nexus also verifies carrier cargo insurance in accordance with FMCSA and USDOT standards.
You can get a quote for open, enclosed, and expedited EV car shipping by checking out our free online quote calculator.
Look at Total EV Ownership Costs, Not Just the Premium
If you’re in the market for a new EV, you already know how much better it can be compared to paying fluctuating fuel prices and lowering your carbon footprint. What you may not know is that insurance prices can still dig into your monthly expenses if left unchecked.
Do your research ahead of time and shop around for multiple quotes. Make sure you include the cost of insurance and shipping your EV home in your total buying budget. That way, when your EV safely arrives at your driveway, you can focus on all the benefits without worrying about finances.
FAQs
Does standard auto insurance cover EV battery replacement?
It depends. Some collision or comprehensive coverage policies will include battery damage caused by an accident, fire, theft, or similar event. Insurers tend not to cover costs resulting from battery degradation or loss of capacity. Always check ahead of time before agreeing to coverage.
How does driving behavior tracking affect Tesla insurance premiums?
Tesla uses a real-time insurance program that tracks telematics. That tells the provider how you drive, calculating a “Safety Score” directly impacting the amount of coverage and how much you pay per month.
Can you transport an uninsured electric vehicle across state lines?
Yes, but that doesn’t mean the carrier’s insurance replaces your personal EV insurance. Cargo insurance typically covers damage during transport, but not damage caused by underlying mechanical or technology-related issues. For that, you’ll want personal coverage.
Do state EV tax incentives offset the higher cost of insurance?
The trouble with state incentives is that they change frequently depending on the administration. It’s best to do a little research on any local programs you can use and then work that into your purchase and monthly expense budget. They typically reduce your overall cost, but not your insurance premiums.
