As more motorists make the transition to electric vehicles (EVs) and hybrid vehicles, knowing how insurance for such vehicles operates is imperative. Insuring an electric or hybrid vehicle operates on the same fundamental principles as insuring a conventional gas-powered car, but there are a number of variations. Such variations are driven by repair costs, advanced technology, battery replacement, and government subsidies.
This piece will delve into the differences between auto insurance for electric and hybrid vehicles, which factors influence the premium, and how to reduce your premium.
Why Electric and Hybrid Vehicles Have More Expensive Insurance Rates
Even as electric and hybrid vehicles become more mainstream, they cost more to insure compared to conventional cars. This is owing to various factors, such as:
Higher Purchase Cost – Electric and hybrid vehicles typically have a higher price tag compared to gasoline-based cars, with repairs and replacement being costly as well.
Dollar-Destroying Repairs and Parts – EVs also possess specialized parts, such as high-voltage batteries, that are very pricey to replace or repair.
Limited Repair Garages – Not everyone is skilled to repair electric vehicles, resulting in increased labor cost.
Battery Expenses – The battery pack is the most costly component of an EV, and if it is damaged, it can result in a complete loss.
Government Discounts and Incentives – Certain insurers provide discounts for having a hybrid or electric vehicle because they are good for the environment.
In spite of these, insurance premiums for EVs and hybrids are slowly getting better as technology improves and more repair methods become available.
Comparing Insurance Premiums: Electric, Hybrid, and Gas Cars
- Electric Vehicles Pay More Premiums
Research indicates that EVs are 10-20% more expensive to insure compared to conventional gasoline vehicles.
The Tesla Model 3 and Nissan Leaf are two of the most costly EVs to insure because they have high repair prices. - Hybrids Pay a Little More than Gas Cars
Hybrid cars are pricier than gas cars, which means they can cost a little more to insure.
But the insurance cost for hybrids is typically lower than for all-electric vehicles. - Gasoline Vehicles Usually Have the Lowest Insurance Prices
Gasoline engines are less costly to fix and have more accessible parts, thus cheaper premiums.
???? Example of Typical Annual Insurance Prices
Type of Vehicle\tTypical Annual Insurance Price
Gasoline Vehicle\t$1,200 – $1,500
Hybrid Vehicle\t$1,400 – $1,700
Electric Vehicle\t$1,600 – $2,200
The prices differ depending on make of vehicle, model, location, and insurance company.
What Kind of Coverage Do Electric and Hybrid Vehicle Owners Require?
When you insure an electric or hybrid vehicle, you require the same basic coverages as a conventional vehicle, but some additional coverage might be required.
- Liability Coverage (Legally Mandated)
Pays for bodily injury and property damage you inflict on others in an accident.
Minimum liability limits differ by state. - Collision Coverage
Pays for repairs to your vehicle after an accident, regardless of fault.
Recommended for pricey EVs and hybrids. - Full Coverage
Pays for non-collision damages such as theft, vandalism, fire, hail, and floods.
Necessary to cover the high-cost battery and parts of an EV. - Uninsured/Underinsured Motorist Coverage
Protects you in case you are hit by an uninsured or underinsured driver. - Battery Coverage (Highly Recommended for EVs)
Certain insurance providers have special coverage for battery damage or failure.
Because EV batteries may run $5,000 – $15,000 to replace, this is an important coverage. - Roadside Assistance and Towing
EVs may not be towed as conventional cars are because towing them improperly can destroy the electric motor.
Make sure you have EV-specialized roadside assistance should you experience a breakdown or battery failure.
Factors That Influence Insurance Premiums for Electric and Hybrid Vehicles - Cost of the Vehicle and Repair Costs
More costly cars are more to insure because it costs more for replacement parts and repairs.
EVs frequently involve the need for special mechanics, so labor is higher. - Cost of Battery Replacement
The lithium-ion battery used in EVs and hybrids is perhaps the most expensive unit.
Damage to a battery can cost even small damage in the form of complete replacement, so high payments are made for insurance. - Safety Equipment and Crash Rating
EVs and hybrids usually come with more advanced safety features, which tend to reduce insurance premiums.
Discounts for vehicles with autonomous braking and lane assist capabilities are available from some insurers. - Location and Weather Conditions
Regions with harsh weather conditions (hurricanes, floods, or wildfires) will possibly have higher insurance premiums due to higher risk.
Regions with high theft rates of EVs might also contribute to higher insurance premiums. - Driving Habits and Mileage
EV owners drive fewer miles, which causes low-mileage discounts.
Some insurers provide usage-based insurance plans that monitor mileage and good driving behavior.
How to Save Money on Electric and Hybrid Car Insurance
Despite the fact that insuring an EV or hybrid vehicle can be costly, there are alternatives to minimize premiums. - Compare Insurance Quotes
Compare quotes from various providers and shop around.
Some insurers specialize in EV and hybrid insurance, offering lower rates. - Look for Green Car Discounts
Some insurance companies offer discounts for driving eco-friendly vehicles.
Ask about hybrid or electric vehicle discounts when purchasing a policy. - Increase Your Deductible
Choosing a higher deductible ($500 – $1,000) lowers your monthly premiums.
Make sure you can afford the deductible in case of an accident. - Bundle Insurance Policies
Bundling home and auto insurance with the same company can result in discounts of as much as 25 percent. - Leverage Safety Discounts
Cars equipped with anti-theft devices, lane departure alerts, and automatic brakes can be eligible for lower premiums. - Keep a Clean Driving Record
Good driving behavior makes you eligible for good driver discounts.
Avoid accidents and speeding tickets to maintain low rates.
Conclusion
Electric and hybrid cars are increasingly in demand, but their premiums are still higher than those for gasoline vehicles because of costly repairs, battery replacements, and technical maintenance requirements. Yet, insurers are changing policies to provide better coverage and lower premiums for green drivers.
If you own a hybrid or an EV, make sure you carry full coverage, battery protection, and roadside assistance for specialized vehicles. To reduce your insurance premiums, compare rates, search for green car discounts, and drive safely.