Younger generations of consumers – Millennials and Gen Z – are more willing to prioritize alternative energy development and phase out fossil fuels than Gen Xers and Baby Boomers, according to the Pew Research Center.
In fact, 56% of Gen Z and 56% of Millennials favor phasing out gas-powered vehicles, compared with 45% of Gen X and 38% of Boomers.
Furthermore, 57% of Millennials and 56% are in favor of phasing out gas-powered cars by 2035. With fewer gasoline vehicles on the road, there likely will be a shift to electric vehicles (EVs) and hybrids.
- How much does electric car insurance cost?
- Who provides electric car insurance?
- Which companies charge less and offer electric vehicle insurance discounts?
- Which insurers offer the best rates on electric vehicles?
- Is auto insurance for Teslas different than other electric cars?
- Why do electric vehicles cost more to insure?
- How to save on electric car insurance?
How much does electric car insurance cost?
Average annual auto insurance premiums for electric cars and hybrid vehicles range from around $1,500 per year for a Mini Cooper SE to more than $4,000 for an Audi RS E-tron GT. CarInsurance.com commissioned Quadrant Information Services to find the average annual rates for EVs and hybrids.
Based on recent data by Insure.com, the Porsche Panamera Turbo S E-Hybrid Executive, Audi RS E-Tron GT, Tesla Model S Plaid, Porsche Taycan Turbo S and Tesla Model S Long Range had the highest average premiums of any EV/hybrid at $4,221, $4,150, $4,115, $4,028 and $3,503, respectively – ranking No. 4, No. 5, No. 7, No. 9 and No. 20 on the list of the most expensive vehicles to insure.
David Griffin Jr., senior vice president for The Dowd Agencies in Holyoke, Massachusetts, says that you will typically pay more to insure an electric or hybrid vehicle than a conventional car.
Who provides electric car insurance?
Large nationwide auto insurance carriers like Allstate, AmTrust, Geico, Farmers, Nationwide, Progressive, State Farm and USAA provide car insurance for EVs. USAA is only available to military personnel and their families, but as a full-service financial company, it’s a good option for those who qualify.
Which companies charge less and offer electric vehicle insurance discounts?
Some insurers charge less and provide discounts for insuring a hybrid or electric vehicle. For best results, it pays to shop around and get price quotes from several carriers when you need to insure an EV.
In his experience, Michael Kim, co-founder of Evcharger Reviews, USAA and State Farm charge the least for insuring hybrid and electric vehicles.
Which insurers offer the best rates on electric vehicles?
Major auto insurance carriers like Geico, Progressive and State Farm all offer insurance for electric vehicles. The insurance companies with the best average annual rates are:
Is auto insurance for Teslas different than other electric cars?
The cost to insure Tesla vehicles is higher than for other EVs or hybrids. This is primarily because Teslas are built with more expensive and sophisticated equipment and charge higher purchase prices, which result in higher insurance premiums.
In fact, both the cost of the parts and the labor to fix an EV or hybrid is higher, says Fred Balkin, an attorney in Rockville, Maryland.
Hybrid and electric car insurance costs can be higher, too, because of the increased risk of theft and vandalism. But, there’s good news.
Why do electric vehicles cost more to insure?
According to Consumer Reports, EVs cost more to insure than gas-powered cars because insurance companies don’t have the kind of historical data to review for EVs like they do for gasoline vehicles.
How to save on electric car insurance?
Some insurers offer specific discounts for owning an electric or hybrid vehicle. But you may also shave dollars off your premium by qualifying for other discounts and pursuing particular strategies, including:
- Raise your deductible, which can decrease your premium costs significantly.
- If you purchase two or more types of insurance from the same carrier, like home and auto, bundling your insurance policies can yield substantial savings.
- Capitalize on low-mileage discounts: Some carriers provide discounts to drivers and carpoolers who travel less than expected miles annually.
- Equip your vehicle with anti-theft devices.
- Maintain a good credit history.
- Earn a loyalty discount by being a longtime customer.
- Keep a clean driving record (no accidents or moving violations in the past three years).
Can electric vehicles help you save in other ways?
Yes. EVs have lower maintenance costs as they don’t need the services that gas-powered vehicles do, such as tune-ups and oil changes. Teslas, for example, could need a new battery, tires and tire rotation, air filters and A/C service, and brakes, but that’s the extent of it.
Tax credits of $7,500 are available for new EVs if the vehicle has four wheels, doesn’t weigh more than 14,000 pounds, has a battery that provides at least 4 kilowatt-hours (kWh) of power and it’s charged from an external source.
Frequently Ask Questions
Are hybrids or electric cars more expensive to insure?
Yes. Research shows that it can be costlier today to insure an electric or hybrid vehicle than a gasoline-powered automobile, depending on the make, model and year. Additionally, hybrids and EVs can have more expensive parts and not all auto shops have experience with these kinds of vehicles.
Which electric vehicles are the cheapest and most expensive to insure?
The most expensive EVs to insure are the Audi RS E-tron GT at an average annual rate of $4,150, the Tesla Model S Plaid at a rate of $4,115, Porsche Taycan Turbo S at a rate of $4,028 per year, Tesla Model S Long Range at a rate of $3,503 and the Tesla Model X Plaid at a rate of $3,386 per year.
The cheapest EVs to insure are the Mini Cooper SE with an annual average rate of $1,479; the Hyundai Kona SEL at a rate of $1,498; Kia Niro EV EX at $1,577; Nissan Leaf S at $1,756; and Chevrolet Bolt EV LT at $1,777 per year.
Are electric cars cheaper to insure?
EVs typically are more expensive to insure because they cost more to purchase and pose a greater financial risk to the insurer. More risk means higher insurance rates.
Methodology & Resources
CarInsurance.com commissioned Quadrant Information Services in 2022 to field rates for a 40-year-old male driver of 2022 new vehicles with good credit, full coverage (100/300/50) and a $500 deductible.
- Consumer Reports. “Electric Vehicles May Cost More to Insure Than Gasoline-Powered Cars.” Accessed May 2022.
- Insure.com. “Ranking the most expensive and cheapest cars to insure for 2022.” Accessed May 2022.
- Pew Research Center. “Younger generations more willing than older to give up fossil fuels, phase out gas-powered cars.” Accessed May 2022.
- Pew Research Center. “Gen Z, Millennials Stand Out for Climate Change Activism, Social Media Engagement With Issue.” Accessed May 2022.
- Progessive.com. “Is insurance more expensive for electric vehicles?” Accessed May 2022.