Electric cars will be saving thousands on fuel. But expect more to insure them. This is a Rivian electric truck.
With concerns about the sustainability of fossil fuels rising and a growing trend toward “greener” technologies, electric vehicles (EVs) have edged further into the forefront. The potential benefits of EVs are numerous –but if you’re considering making your next vehicle purchase an EV, you should know you may end up paying more in insurance premiums. We’ll delve into why exactly this is and what you can do about it.
Benefits of Driving an Electric Vehicle
First, let’s take a quick look at the perks of going electric, particularly those that might offset the additional insurance costs.
The most significant advantage when it comes to money is fuel efficiency: electric cars are much more fuel-efficient than their gasoline-burning counterparts. Even when the consumption rate fails to meet the promises of car manufacturers, the numbers are still significantly better than those of a gas-burning engine. Better energy efficiency means lower fuel bills.
Electric vehicles also tend to have a lower maintenance cost than more traditional vehicles. They have fewer components that are prone to wear and tear, reducing the frequency of necessary repairs. The regenerative braking systems present in many EVs lengthen the lifespan of the car’s brake pads, further bringing down maintenance costs.
Tax incentives and insurance discounts are other good reasons to invest in an electric vehicle. Many insurance companies offer discounts for green vehicles, including EVs and hybrids. The government has also been known to provide tax incentives in order to further encourage the adoption of more energy-efficient vehicles.
Finally — and this is the draw for many EV enthusiasts — there’s the personal satisfaction of making a little less of an impact on the environment. The ecologically perfect vehicle doesn’t exist, and never may, but electric vehicles tend to make a much smaller negative impact on the world.
Why Are EVs More Expensive to Insure?
Lucid electric
But if EVs are less expensive to maintain, how can they be more expensive to insure? A couple of reasons.
First, insurance for electric vehicles is subject to the same range of criteria as their traditional counterparts: your age, driving and claims history, marital status, and even your credit score and ZIP code can make a difference in how much you’ll pay for auto insurance.
Secondly, while the parts on EVs tend to be longer-lasting and break less frequently, they’re more expensive to replace when they finally do break. EV batteries are particularly difficult and expensive to replace. Servicing electric vehicles is also more expensive in general, since working on them requires specialized tools and training that may not be available everywhere.
How To Bring Those Insurance Premiums Down
So how much more does it cost to insure an electric vehicle? As you might expect, that depends on the vehicle. A Toyota RAV4 Hybrid only costs about $1700 in yearly premiums — not far off from the national average of $1548. On the other hand, insuring an expensive high-end car like the Tesla Model X or Porsche Taycan could run you up to $4000 or more. Most common commercial EVs will cost somewhere between $1700 and $2400 to insure yearly. While not necessarily a dealbreaker, it is a significant difference.
Fortunately, there are some ways you can bring those premiums down to a level more comparable with more traditional vehicles. There are the aforementioned tax incentives and insurance discounts available specifically for green vehicles. Your existing insurance carrier may not offer such a discount, in which case it might be worth looking into switching companies. If you want to go comparison shopping, you can get free car insurance quotes from a variety of online tools — Kristine Lee at the insurance comparison site The Zebra offers a frequently updated guide to getting car insurance quotes and finding a better deal. Some insurance companies even specialize in electric vehicles.
There are also more time-honored ways of bringing your auto insurance rates down. For example, you can ask your insurer what kind of other discounts you might qualify for (low mileage, good student, occupational or military discount, multi-vehicle discount, etc).
You could also invest in some additional anti-theft and safety equipment for your vehicle — not a bad idea regardless, given that EVs tend to be a larger financial investment overall. Insurers will take note of this and will likely offer a discount for reducing the risk of a costly claim. Taking a defensive driving course is another great way to get a discount. Finally, if you’re a homeowner, consider bundling your home and auto insurance together — most insurers will offer a discount for that.
While electric vehicles currently cost more to insure, that may change as they continue to edge into the mainstream and become more commonplace. The small market share of EVs naturally drives costs up, but as green solutions become more popular and important to businesses, the insurance rates will likely evolve and come down to rates similar to those of gas-burning vehicles.
Author: Bhok Thompson
Bhok Thompson is a Singapore-based engineer, entrepreneur, and self-proclaimed “eco-tinkerer” who thrives at the intersection of sustainability, business, and cutting-edge technology. With a background in mechanical engineering and a deep fascination with renewable energy, Bhok has dedicated his career to developing innovative solutions that bridge environmental consciousness with profitability. A frequent contributor to Green Prophet, Bhok writes about futuristic green tech, urban sustainability, and the latest trends in eco-friendly startups. His passion for engineering meets his love for business as he mentors young entrepreneurs looking to create scalable, impact-driven companies. Beyond his work, Bhok is an avid collector of vintage mechanical watches, believing they represent an era of precision and craftsmanship that modern technology often overlooks. On weekends, you can find him exploring the vibrant street food scene in Singapore—because, as he says, "Innovation starts with good energy, and nothing fuels creativity like great food!" Reach out: [email protected]
