skyrocketing insurance rates negatively impacting the adoption of electric vehicles in personal accounts; purchaser of a compact electric vehicle reports a doubling of their insurance rate following the purchase.
Electric vehicles (EVs) are becoming increasingly popular, with nearly half of drivers considering them for their next car or truck. However, one area where EVs may not shine as brightly is insurance.
A Reddit user named Brandon_Storm shared their experience of being quoted $328 a month for EV insurance, which was 2.5 times more than their current gas-powered vehicle insurance. Another user, zxcvbn113, had a different experience, stating their insurance dropped a couple of hundred dollars per year when they switched from a gas-powered vehicle to an electric vehicle in New Brunswick, Canada.
The higher insurance costs for EVs can be attributed to several factors. Repairs and replacements for EVs are typically more expensive, and qualified shops are less common. This is because EVs have more expensive vehicle components. However, experienced drivers often receive eco-discounts, making premiums lower overall. On the other hand, young or inexperienced drivers face higher premiums as insurers consider their higher accident risk linked to underestimating electric cars' stronger acceleration.
It's recommended to price insurance early, compare comprehensively, and evaluate the full ownership picture with care when considering an EV. Quotes for a new Tesla Model Y, for example, start around $250, but fewer carriers participate compared to a new Toyota RAV4, which can range from about $80 to $350 per month.
Coverage choices can influence the premium cost for EV insurance. For instance, liability only policies for EVs and gas cars are similar, but a higher percentage of EVs are purchased new and come with comprehensive and collision coverage, which raises premiums.
Smart shopping with quote tools can offset part of the difference in EV insurance premiums. Insurers see higher loss costs when claims occur for EVs, which gets priced into premiums. However, greater repair capacity and more actuarial data will help insurers price risk more precisely, which will narrow the premium differences between gas-powered vehicles and EVs.
Ownership costs for EVs are expected to ease as charging networks expand and more EV certified technicians enter the market. Fuel savings and lower routine maintenance strengthen the overall value case for owning an EV. This can be especially true in more rural areas.
Regional car insurance rate variation is real. The highest EV insurance rates are in Florida, Louisiana, and Michigan, while the lowest rates are in North Carolina, Ohio, and Hawaii. It's always a good idea to shop around for the best insurance deals, as suggested by Reddit user BurritoLover2016.
In summary, while the initial cost of EV insurance may be higher, the long-term savings in fuel and maintenance, coupled with the expected decrease in ownership costs, make EVs a viable and cost-effective choice for many. It's essential to compare insurance quotes, understand the factors affecting premiums, and consider the full ownership picture before making a decision.
