Everything you need to know about insuring an electric vehicle

Does it cost more to insure an electric vehicle?

As the electric vehicle market grows, EVs are approaching cost parity with gas-powered or internal combustion engine (ICE) vehicles. However, the National Association of Insurance Commissioners (NAIC) warns that EVs still cost significantly more to insure than ICEs. 

Why? It comes down to a few basic factors: 

• Overall vehicle values are still higher: While some automakers, like Hyundai and Kia, are putting out new EVs at increasingly low price points, the average EV still costs significantly more than a gas-powered car. According to Kelley Blue Book, the average transaction price (APT) for new EVs was $56,575 in August 2024 vs. $47,870 for ICEs. 
• EV parts may cost more: Replacement and repair components for EVs can be more expensive, and EV repairs are more likely to use original equipment manufacturer (OEM) parts, raising the overall cost of repairs. 
• Repairs require specialized technicians: If your EV needs repairs, you may need to bring it to a shop with special equipment and training. These shops typically charge more for labor to account for their investment. 
• Claim payouts are higher: Due to the higher cost of parts and labor, CCC Intelligent Solutions found that the average EV costs over 45 percent more to repair than the average gas-powered vehicle, leading to higher claim amounts. 
• Claims take longer to process: According to a recent report, the average repair time for EVs is 15.6 days, compared to 12.7 days for gas-powered vehicles.  
• EV owners file more claims: A 2024 report by LexisNexis Risk Solutions found that claim frequency for EVs was 17 percent higher than for passenger vehicles overall.

How much does electric car insurance cost?

For gas-powered vehicles, the national average cost of car insurance is $2,458 for full coverage and $678 for minimum coverage. When Bankrate’s insurance editorial team analyzed average premium data for the most popular EV models, however, nearly every vehicle cost more to insure than the national average — sometimes significantly more.  

The following table compares average premiums for 10 of the top EV models in 2024, based on data from Quadrant Information Services. Keep in mind that your personal rates may vary significantly based on personal rating factors like your location, age, driving record and credit history.

Where can I buy electric car insurance? 

EV owners can buy auto insurance from the same national and regional car insurance carriers that write policies for other passenger vehicles. The process is the same, and EV policies will feature the same coverage options, such as liability, comprehensive and collision coverage. Outside of Tesla’s proprietary insurance product, there is no major carrier that specializes in auto insurance for electric cars. 

However, some companies offer unique discounts and perks to electric and hybrid car owners. Travelers and Lemonade offer discounts for green vehicles, and you may find additional savings from other companies.

Tesla Insurance

Tesla owners have a unique option for electric vehicle insurance. They may be able to purchase Tesla Insurance directly through the company's mobile app. It offers all the same standard coverage options you would expect with a national carrier, plus a handful of endorsements that vary by state. One potential endorsement is the Autonomous Vehicle Protection Package. This includes:

• Autonomous vehicle owner liability
• Cyber identity fraud expenses
• Electronic key replacement
• Wall charger coverage

Another feature of Tesla Insurance is that it uses telematics to track real-time driving habits and behaviors to rate a driver’s car insurance policy. These are tracked by features within the Tesla itself, and could change based on the vehicle’s monthly Safety Score. Drivers are not rated based on car insurance rating factors like age, claims history and credit score. Instead, Tesla analyzes the type of vehicle you drive, where you live, how often and how safely you drive and your selected coverage.

Currently, Tesla Insurance is only available in Arizona, Colorado, Illinois, Maryland, Minnesota, Nevada, Ohio, Oregon, Texas, Utah and Virginia. It is also available in California, but does not base rates off of telematics data in this state. Additionally, if you are a California driver, but do not drive a Tesla, you may still be eligible for a Tesla policy.

How to save on electric car insurance

If you decide to purchase an electric vehicle, you may be able to save on insurance in many of the same ways conventional car owners do. If you already have an electric car and are curious about finding more affordable rates, consider requesting quotes from several providers. You might get a better deal by switching to another company.

You can also take advantage of discounts. In addition to the unique EV discounts offered by a small handful of companies, EV drivers may be eligible for more standard discounts, such as good driver discounts, good student discounts and bundling discounts. 

If you own an electric vehicle, you may be eligible for savings beyond insurance. Many local, state and federal programs exist that offer rebates or tax credits for purchasing an electric vehicle. The federal government offers tax credits up to $7,500 for purchasing certain makes and models of electric cars and SUVs purchased in or after 2023. You may also qualify for tax credits offered by your state or local government or rebates from energy companies to support installation of a home EV charging system.

What are the benefits of driving an electric vehicle?

Whether owning an electric vehicle is the right choice for you will depend on your personal circumstances. Here are five benefits of driving one you can consider:

• Lower environmental impact: Driving an electric car won’t eliminate your carbon footprint altogether, but it will significantly reduce it. It could also put you ahead of the curve if your state has adopted major emissions reduction goals. 
• Reduced inhaled emissions: Tailpipe emissions pollute both the environment and your vehicle’s interior to varying degrees, depending on factors such as the type of car you drive and its climate control system. Car emissions contain many dangerous carcinogens, including volatile carbon oxides, organic compounds and particulate matter. An electric car may help you avoid breathing in these emissions.
• Reduced fuel expenses: Bankrate’s Hidden Cost of Car Ownership study found that fuel costs Americans an estimated $1,837 per year — a significant savings opportunity for EV owners. 
• Extended battery life: Reports about electric car battery performance vary widely. However, based on predictive modeling conducted by the National Renewable Energy Laboratory, new technology has extended the life of some types of batteries up to 15 years. And research continues on ways to extend electric car battery life.
• Reduced maintenance expenses: While EVs still cost more to repair, they need less frequent maintenance than gas-powered cars, which could significantly bring down one key ownership expense. 

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze November 2024 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a single, 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2022 Toyota Camry, commute five days a week and drive 12,000 miles annually. 

These are sample rates and should only be used for comparative purposes. 

Model: To determine cost by vehicle type, we evaluated our base profile with the following vehicles applied: BMW i4, Ford F-150 Lightning, Ford Mustang Mach-E, Hyundai Ioniq5, Kia EV6, Rivian R1S, Tesla Model 3, Tesla Model X, Tesla Model Y, Volkswagen ID.4 and Toyota Camry (base).