Tired of the sticker shock you experience every time you fill up at the gas pump lately? Want to reduce your carbon footprint? Consider driving an electric vehicle (EV) or hybrid.

These vehicles rely entirely or partially upon batteries to power your ride, saving you significant money on fuel costs – especially since gas prices still are on the rise.

But like owners of fully gas-powered automobiles, buyers of electric and hybrid cars need to insure their vehicles. But what does it cost to insure an EV or hybrid?

This guide will help you learn more about insurance rates for EVs, insurance rates for hybrid cars, hybrid/electric car insurance discounts and more.

Getting car insurance for an electric car

Getting car insurance for an EV is similar to shopping for insurance like any other vehicle. Make sure you get quotes to compare the rates of at least three companies as rates are highly variable on each driver and their location, a driver’s history and the make and model of the car.

Here are three things to do when you’re buying a new insurance policy:

  1. Get an idea of what you can expect to pay and gather vehicle/personal documents and information.
  2. Review your current policy and assess your current coverages – you might want to increase your coverage if you’re purchasing a more expensive vehicle.
  3. Compare insurance quotes and research insurers to find the best one for you.

Electric car insurance versus conventional car insurance versus hybrid insurance

Again, you can likely expect to pay more to insure a hybrid or electric vehicle than you would for a gasoline-powered car for previously mentioned reasons like higher repair costs.

Amy Harris, a State Farm Insurance spokeswoman, says her company uses a variety of factors when determining the price for each auto insurance policy attached to a hybrid or EV.

Amy Harris - State Farm Insurance Spokeswoman
Amy Harris
State Farm Insurance Spokeswoman

"Prices for individual customers are influenced by a policyholder's driving record, the make and model of the vehicle, who drives the vehicle, how it is driven and the amount and types of coverage selected – among other things," she says.

"For State Farm auto customers, there is not much difference in insuring an electric or hybrid car compared to a gasoline-powered one. We use the same underwriting guidelines for all these vehicles."

P.J. Miller, a partner and independent insurance agent with Wallace & Turner Insurance, says he hasn't noticed a major rate disparity between premiums for EVs/hybrids versus gas-powered autos at his agency.

P.J. Miller - Partner & Independent Insurance Agent with Wallace & Turner Insurance
P.J. Miller
Partner & Independent Insurance Agent with Wallace & Turner Insurance

"Car insurance rates are predicated on so many factors – credit scores, location of the garage and the vehicle, driving record and price of the car. The engine and powertrain haven't factored in as a major portion of the typical rate-making process," Miller says.

Do you need extra insurance coverage for electric vehicle drivers?

When you aim to insure a hybrid or EV, you don't necessarily need to purchase any additional or special coverages – meaning protection above and beyond typical coverage for liability, collision/comprehensive, uninsured/underinsured motorist, bodily injury, personal injury protection/medical payments and property damage liability.

The experts recommend considering optional car insurance coverage for any vehicle if you want a greater level of protection and peace of mind, including rental reimbursement, roadside assistance, glass coverage, forgiveness coverage, umbrella insurance and non-owner car insurance.

Expert Advice
Janet Ruiz - Director of Strategic Communications for the III
Janet Ruiz
Director of Strategic Communications for the Insurance Information Institute

"Gap insurance is a good additional coverage to purchase if your electric or hybrid vehicle is three years or newer," Ruiz says. "With gap coverage, in the event of a total loss, you will get the newer model year replacement."

Learn more about How Much Does Electric Car Insurance Costs?

What are the benefits of driving electric vehicles?

Electric vehicles depreciate at a similar rate to gas-powered vehicles, according to a 2020 report from Consumer Reports.

“New electric vehicles that go at least 200 miles on a single charge are projected to maintain their value as well as comparable gas-powered vehicles over the next five years,” the report says.

“New data show that both battery electric vehicle (BEVs) and plug-in hybrid electric vehicle (PHEVs) drivers are saving 50 percent on their repair and maintenance costs when averaged over a typical vehicle lifetime.”

Additionally, tax credits of $7,500 are available for new EVs come tax time if the following criteria are met:

  • The vehicle has four wheels.
  • It doesn’t weigh more than 14,000 pounds.
  • It has a battery that provides at least 4 kilowatt-hours (kWh) of power.
  • It gets charged from an external source.
Fred Balkin - Personal Injury Attorney with Stein Sperling in Rockville, Maryland
Fred Balkin
Personal Injury Attorney with Stein Sperling in Rockville, Maryland

“The depreciation on Teslas and other electric/hybrid vehicles is lower than for many gas-powered cars. They really seem to hold their value and their reliability seems to be very good," says Fred Balkin.

Pros and cons of hybrids versus EVs versus gas-powered cars

Andre Disselkamp, the co-founder of Finsurancy, an insurance broker, says hybrids, EVs and gasoline-powered cars each have their advantages and disadvantages.

Andre Disselkamp - Co-Founder of Finsurancy, an Insurance Broker
Andre Disselkamp
Co-Founder of Finsurancy, an Insurance Broker

"Hybrid vehicles are often seen as the best option for those looking to reduce their carbon footprint. They are powered by gasoline and electricity, meaning they produce minimal emissions. When stored electrical power in the batteries runs out, the gasoline engine kicks in. Every time you brake, you begin to recharge the battery," he says.

Gas-fueled vehicles are usually more powerful and faster than hybrids or EVs, making them better for drivers who require those types of capabilities.

Michael Kim, co-founder of Evcharger Reviews – a site that reviews EVs and EV home chargers – and an EV/hybrid vehicle expert who drives a Tesla says.

Michael Kim - Co-Founder of Evcharger Reviews
Michael Kim
Co-Founder of Evcharger Reviews

"Electric vehicles are typically more expensive to purchase than hybrids and gasoline-powered cars," says Michael Kim

"However, hybrids and gasoline-powered cars require more regular tune-ups and maintenance than electric vehicles. Over the long run, EVs may be less expensive to own and maintain than hybrids or gasoline-powered vehicles."

Janet Ruiz, director of Strategic Communications for the Insurance Information Institute, says consumers have a greater array of choices today when it comes to the vehicles they drive.

Janet Ruiz - Director of Strategic Communications for the III
Janet Ruiz
Director of Strategic Communications for the Insurance Information Institute

"There are various options for consumers to use renewable energy by purchasing a hybrid or electric vehicle. They may be more expensive to purchase initially. However, they are less expensive to fuel – especially if they are entirely electric and fueled by plug-in charging stations," she says.

Some EVs like the Chevrolet Bolt and Nissan Leaf are two of the most affordable EVS and there will be more affordable EVS on the market in the next few years, according to Kelley Blue Book.

Before committing to an electric car or hybrid vehicle, it's essential to do your homework and learn the average cost to charge or fuel the car each month and whether you want to own or lease the auto to keep your monthly payments affordable.

Frequently Ask Questions

Having an in-home EV charging unit in your garage or on your property should not affect your homeowners insurance premiums negatively, says Janet Ruiz, an Insurance Information Institute representative. But it's important to inform your insurer that you have an in-home EV charging unit so that it will be covered in case of a loss.

Roadside assistance coverage may be included in your automobile insurance policy at no extra cost, or your carrier may charge extra for this protection, regardless of the type of vehicle you drive.

Sources:

  1. Consumer Reports. “Electric Vehicle Ownership Costs: Today’s Electric Vehicles Offer Big Savings for Consumers.” Accessed May 2022.
  2. Consumer Reports. “Electric Vehicles May Cost More to Insure Than Gasoline-Powered Cars.” Accessed May 2022.
  3. Insure. “Ranking the most expensive and cheapest cars to insure for 2022.” Accessed May 2022.
  4. Kelley Blue Book. “Busting the Myths and Fears of Buying an Electric Car.” Accessed May 2022.
  5. Progessive. “Is insurance more expensive for electric vehicles?” Accessed May 2022.
author image
Erik Martin
Contributing Researcher

Erik J. Martin is a Chicago area-based freelance writer whose articles have been published by AARP The Magazine, The Motley Fool, The Costco Connection, USAA, US Chamber of Commerce, Bankrate, The Chicago Tribune, and other publications. He often writes on topics related to insurance, real estate, personal finance, business, technology, health care, and entertainment. Erik also hosts a podcast and publishes several blogs, including Martinspiration.com and Cineversegroup.com. Follow him on LinkedIn: Erik Martin