Are Electric Cars Cheaper To Insure? In-Depth Guide

With electric vehicles gaining unprecedented popularity in the auto industry in the last few years, more car owners are wondering whether their insurance expenses will increase or decrease when opting for the more eco-friendly alternative.

Electric cars are usually more expensive to insure than their conventional counterparts. Having said that, the difference in insurance costs between electric cars and gas-fueled alternatives is decreasing significantly as time goes by.

This increase in insurance costs happens because electric vehicles tend to be more expensive both to purchase and repair. That said, although you may spend a bit more on insurance, you’re bound to save a lot more on gas and environmental taxes when using an electric car. To learn more, keep reading. 

How Much More Expensive Are Electric Cars To Insure?

Electric cars are, on average, 29.48% more expensive to insure. This difference is based on the following data collected about the current insurance prices of some of the most popular vehicles and their electric counterparts.

Car ModelTypeTypeIncrease percentage
GasElectric
Ford Focus$1,253$1,61929.2%
BMW$1,664$2,38443.3%
Mercedes Benz$2,349$3,00027.7%
Honda Civic$1,352$1,87638.8%
Fiat$1,350$1,4638.4%
Average29.48%
A table showing how much more expensive electric cars are to insure.

How Does Tesla Insurance Compare to Other Alternatives?

Tesla insurance is significantly more expensive than other options. However, it also offers lowered commissions, cheaper repairs, and other special coverages that other insurers do not.

Teslas generally come with pricier insurance plans compared to other luxury brand cars. The average insurance cost of a Tesla hovers around $4,548, which is 185% more expensive than your average registered vehicle. This steep price is caused by their high repair costs, which increases the amount you will have to pay to cover the cost of collision coverage.

Other factors that contribute to the plan’s high price include:

  • The limited number of approved body-repair shops that can serve a Tesla.
  • The fact that aluminum frames are more challenging to repair than steel ones.
  • As mentioned above, electric vehicles are generally more expensive to purchase, which means they are also more expensive to insure than their gas-fueled alternatives.
Electric cars are generally more expensive to insure than their conventional counterparts. However, this additional cost is balanced by savings made on gas, environmental taxes, and more.
Photo @orathaim164 via Twenty20

Keep in mind that the numbers quoted above are only an average. Your specific insurance payments will depend on your model, driving history, location, and more.

Having said this, Tesla is making a conscious effort to lower the insurance costs thor their drivers moving forward by selling their own insurance policies through Tesla Insurance Services. They also offer a variety of extra services and coverages that justify the heftier price point.

A car owner on Tesla insurance can repair their car for a fraction of the price needed to be paid otherwise. These lowered repair costs, in turn, can reduce the cost of insurance plans. By choosing this strategy, Tesla is making insurance more affordable for all drivers.

The company also offers lowered commission rates on its insurance products, along with other discounts like group rates, good driver discounts, and so on. Aside from excellent deals, Tesla also includes special coverages in its insurance, including electronic key replacement and wall charger coverage.

You’ll also benefit from free roadside assistance, rental reimbursement, and loan gap coverage when purchasing Tesla insurance plans.

General Insurers and the Electric Vehicle Market

General insurers don’t have a clear understanding of how to price electric vehicles’ insurances yet. This is because insurance premiums are linked to risk, and in order to measure risk accurately, comprehensive and accurate data needs to be available. 

Given the fact that the electric vehicle industry is still relatively new, the information available is still too limited to make objective evaluations when it comes to risk.

Based on this reasoning, general insurance providers cannot price their plans for electric vehicles accurately. Having said this, new data is constantly being collected. This means that more accurate projections are bound to be made in the near future, allowing insurers a better idea of how to price plans.

The Future of the Electric Vehicle Industry

The auto industry’s future is expected to be based upon electric vehicles. With more suppliers entering this market, the prices will inevitably lower over time, allowing electric cars to gain further mainstream popularity.

With technology and mechanics advancing at a rapid speed, further improvements can be expected when it comes to these vehicles’ safety levels and general quality. This, in turn, will only make insurance costs more attractive for consumers.

I wrote a somewhat similar article that explains if electric cars will put mechanics out of business some day. Do we need to get worried?

Autopilot Vehicles: Insurance Rates and Safety Concerns

Autopilot vehicles tend to come with an even higher premium than EVs when it comes to insurance plans. Their high initial and repair costs are weighed more heavily than their safety benefits, resulting in higher insurance rates. 

Autopilot vehicles employ technologies that can help drivers avoid dangerous and accident-causing situations. This advanced software, in combination with high-technology hardware, makes these vehicles generally safer to drive than conventional options.

You can learn more about how these vehicles work in this YouTube video:

https://www.youtube.com/watch?v=xMH8dk9b3yA

What Makes Electric Vehicles Safer?

Factors that make electric vehicles safer than conventional vehicles include a higher general weight and lower flammability. EVs also offer a lower chance of collisions and fewer pedestrian accidents.

Vehicles that work on an electric battery tend to weigh significantly more, which provides an added safety boost. Heavier cars tend to be more controllable – therefore, they experience less force and, in turn, more minor damages during a crash.

Although there are many controversies and debates surrounding this topic, lithium-ion batteries (on which electric cars run) are actually way less flammable than traditional gasoline. 

Even in the cases when the former happens to cause a fire, the damage seems to be much more contained and controllable. This quality gives electric vehicles a significant advantage over gas-fueled cars.

Another advantage that electric cars offer when it comes to safety is that in case of a crash, they tend to lead to less severe injuries and fewer injuries overall compared to the conventional options.

EV Speedy’s Take

The auto industry’s future revolves around electric vehicles as they are not only safer but are also becoming more affordable.

This means that, in the long run, insurance prices should dip from the high premiums available today. Insurers just have to understand EVs and self driving cars better. The technology will also have to prove itself.


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Erwin Meyer
Erwin Meyer

Thanks for visiting evspeedy.com. The goal of this site is to be a helpful resource for Tesla and EV owners as this is where my passion lies. I was a TSLA shareholder before the hype and still am. I also believe in Tesla’s speedy mission to accelerate the world to a sustainable future.