Is insurance more expensive for electric vehicles?

Insurance for an electric car may cost more than insurance for a regular gas-powered car. An electric car's higher price tag and more complex equipment means it may cost more to repair or replace if it's in an accident. That can mean higher rates for policyholders who carry comprehensive and collision coverage. However, tax incentives and long-term savings on fuel and maintenance can help offset higher insurance rates.

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Why do electric cars cost more to insure?

Insurance costs for EVs and hybrid cars can be higher than for internal combustion engine (ICE) vehicles largely because they can be more expensive to repair and replace. For example, a new EV battery ranges between $4,000 and $20,000 depending on the make and model of your EV, compared to $100-200 for an ICE car battery. If the battery of an EV is damaged in an accident, that's a significantly more expensive replacement cost.

On top of more expensive parts, there also aren't as many repair shops with technicians trained to fix electric vehicles versus traditional vehicles. That means those qualified facilities may charge more for repairs because of the specialized training required.

All this leads to potentially higher costs for insurance companies in the event of a claim involving an electric or hybrid vehicle, resulting in higher rates for electric vehicle policyholders. Like how the make and model of any car can affect its insurance rate, this additional risk has nothing to do with the driver — it's due to the car itself. However, while electric vehicles are currently far from the cheapest cars to insure, as they become more commonplace and the availability of parts and qualified repair shops grows, the cost to fix them should go down (as should electric car insurance rates).

Why do electric cars cost more?

EVs cost more than ICE vehicles because of the high cost of the batteries that power them. The average price for an electric vehicle in July 2023 was $53,469 vs. a gas-powered vehicle at $48,334, according to Cox Automotive. EV batteries are made from minerals such as lithium, cobalt, and nickel, which are in high demand and sometimes limited supply.

Given that batteries are the biggest and most significant component of an EV, U.S. News & World Report explains that EVs are expensive because their batteries are expensive. That said, EV prices are expected to continue decreasing as the EV revolution progresses.

Are hybrids more expensive to insure?

Hybrid vehicles tend to be more affordable than EVs because they have smaller batteries, but they may still be more expensive to insure than ICE vehicles because of their batteries and advanced technology. For example, Forbes reports that the average annual premium for a hybrid Honda CRV is $1,831, while insurance for the gas-powered version costs about $1,574.

Do insurance companies give out discounts for electric or hybrid vehicles?

Discounts on electric and hybrid vehicle insurance vary by insurer. To find out which car insurance discounts you might qualify for, ask about them when you get a quote for auto insurance. While Progressive doesn't offer a discount specific to hybrid or electric vehicles, our car insurance customers earn an average of seven discounts.

Are there ways to reduce electric car insurance costs?

You may qualify for cheaper car insurance by maintaining a clean driving record and using other strategies to lower your car insurance. Your age and location also impact your car insurance premium.

Learn more about the factors that impact car insurance costs.

Pro tip:

You can help offset electric car insurance costs by taking advantage of rebates at the local, state, and federal levels. You might also be eligible for a federal tax credit depending on the make and model of the vehicle. Plus, you can save money by not having to pay for gas or the kind of maintenance a regular car needs, like oil changes. Installing an at-home station for charging your EV could also save you more.

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