Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Mar 21, 2022

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Key Takeaways

  • Car insurance rates for an electric car can increase by up to 50% compared to its gas counterparts
  • Higher car insurance costs for EVs result from their higher purchase price and the higher cost to repair them
  • Electric car owners should shop around to compare different car insurance rates and find the most affordable option

More and more consumers are purchasing electric vehicles (EVs) to save on gas and protect the environment. In addition to not requiring fuel, EVs don’t need oil changes, are generally easier on the brakes, and have fewer moving parts to break.

However, the benefits of EVs come with tradeoffs, including a higher purchase price and the fact that electric car insurance is expensive. The parts in an electric vehicle can be expensive to repair and replace. Electric cars also have more complex equipment, and their components are often vulnerable to damage in an accident. 

As a result, insurance companies charge more to insure an electric vehicle. So, before purchasing an EV, it’s best to research the potential cost of insuring your car.

How much does it cost to insure an electric car?

Insuring an electric car is expensive because EVs are often pricey to buy and repair. For example, if the battery pack in an EV gets damaged, certain safety protocols are often necessary, which adds more to the repair bill. 

Also, there aren’t many shops with technicians trained to fix electric vehicles. Qualified facilities charge more as their mechanics have specialized training to repair an EV properly. 

To get an idea of how much it may cost to insure your EV, let’s take a look at average car insurance rates for the most common electric car models. 

Average Electric Vehicle Car Insurance Rates

Vehicle Year Monthly premium
Porsche Taycon 2021 $297.25
Tesla Model S 2021 $251.8
Tesla Model X 2021 $240.41
Tesla Model Y 2021 $158.41
Audi E Tron 2021 $157.75
Volvo XC40 Recharge 2021 $157.16
Tesla Model 3 2021 $154.58
Ford Mustang Mach E 2021 $148.66
BMW 13 2021 $141.66
VW ID.4 2021 $139.91 

Are electric vehicles cheaper to insure than conventional cars?

Is it cheaper to insure an electric car? In short, no. Electric vehicles are often expensive to insure than gas-powered cars. This is due to a variety of reasons, including:

  • The purchase price of an EV is typically higher than that of a combustion vehicle. 
  • Electric vehicles are more susceptible to damage in accidents as EVs have more sensor-based applications. 
  • When sensory-based parts within an EV are damaged, they’re more likely to need replacement.
  • EV parts are more expensive to repair and/or replace. 
  • As EVs are more expensive to repair, insurance companies are more likely to declare an electric vehicle totaled than a traditional gas-powered car. 

Even a minor accident that damages the battery pack within an electric vehicle can easily cost more than $15,000. 

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Which companies offer insurance for electric cars?

Other than the electric car insurance cost, the requirements and process of insuring an EV are generally the same as insuring a gas-powered vehicle. Electric car policies offer the same coverage options, including liability, bodily injury, collision, and comprehensive coverages. Top car insurance companies that offer the best insurance for electric cars include:

  • Allstate
  • Farmers
  • Geico
  • Liberty Mutual
  • Nationwide
  • Progressive
  • State Farm
  • USAA

This list isn’t exhaustive, so it’s important to shop around with your preferred providers to see if they’ll offer coverage for your EV.

Do insurance companies offer discounts for electric vehicles?   

Several insurance companies offer policies for electric vehicles, but the options are limited when it comes to discounts. Liberty Mutual and Travelers, however, are known to offer exclusive discounts to electric car owners. 

But even with those discounts, you may still have to pay more than the national average for gas-powered cars to insure your EV. So, overall, the tradeoff of not having to pay for gas and getting tax breaks with an EV is offset by higher car insurance rates. 

Apart from exclusive EV discounts, you can also access a range of common car insurance discounts, including:

  • Safe driver discount
  • Anti-theft device discount
  • Multiple vehicles discount
  • Policy bundling discount
  • Good student discount
  • Low mileage discount
  • Defensive driver class discount

To find car insurance discounts, look up your preferred insurer’s discounts online. Then, check for mandatory discounts. 

After researching discounts, figure out other ways to lower your potential electric car insurance rates. For example, you could lower your base car insurance rate. This involves taking steps to reduce your risk to the insurer, such as practicing good driving habits, improving your credit score, and purchasing a cheaper electric vehicle.

Get Savings With Tax Breaks for Your EV

You can save on taxes when you own an electric vehicle. The IRS offers a Qualified Plug-In Electric Drive Motor Vehicles credit for owners of qualifying electric vehicles. 

If you purchased your EV after December 31, 2009, you can receive up to $7,500. To qualify, your car must have a certain traction battery capacity and gross vehicle weight rating. This means your car’s battery must have a specific capacity that’s used to power it. 

The battery must generate at least 4 kilowatt-hours of capacity. The weight rating refers to the maximum amount of weight your vehicle can handle safely. Your EV must have a weight rating of less than 14,000 pounds to qualify for the tax credit. If you’re not sure about your car’s specifications, check the manual or visit the IRS website for a list of qualifying vehicles. 

Electric Car Insurance: The Bottom Line

While electric vehicles come with their perks, they do have some disadvantages. Because of their higher purchase price and more expensive parts, electric vehicles cost more to insure. But that doesn’t mean you can’t find the best possible rates.