Why are electric car insurance premiums so high?

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Don’t let the high average premium deter you from buying an electric car.

Key Point

• Electric vehicles contain expensive parts that are expensive to replace.
• In addition, there are few mechanics with repair experience.
• There are steps electric car owners can take to find affordable car insurance.

The increased availability of electric vehicles is encouraging to those concerned about climate change and how conventional gasoline vehicles are contributing to it. But as anyone who has ever tried to buy an electric car knows, they don’t come cheap. And the higher costs extend to the insurance that drivers pay to cover them.

Let’s take a closer look at why and what electric vehicle drivers can do to keep costs down.

Modern technology is expensive

Electric vehicles employ more complex technology than many conventional gasoline vehicles. This technology helps the driver save his costs on gas and long-term maintenance, but it will bite the driver if he gets into an accident.

The parts required to repair an electric car can be expensive, and as a result, auto insurance companies will have to pay a lot to get the car back on the road. Further complicating matters is the fact that many mechanics are not familiar with how these electric vehicles work. Drivers may have to bring their electric vehicle to a specialty shop for repairs, which can increase labor costs. For this reason, insurance companies charge higher rates for owners of electric vehicles, which does not apply to all types of insurance.

Collision and Comprehensive Coverage protects the policyholder’s own vehicle in the event of damage caused by accident, animal collision, weather damage, etc. As such, the cost of these protections is often higher for electric vehicles.

However, liability protection, required by state law, pays for medical bills and repairs to other people and their property if the policyholder causes an accident. This type of protection has nothing to do with the policyholder’s own vehicle, so the cost of this coverage is not affected by owning an electric vehicle.

What electric car owners can do to keep costs down

The type of car a driver owns is just one of many factors that affect insurance premiums. Insurance companies also look at a driver’s accident history, zip code, education level, marital status, etc. to assess the risk of an accident. Each company weights all these factors slightly differently, so every estimate is different.

Drivers can use this to their advantage by comparing quotes from multiple companies to see which offers the best deal. It only takes a few minutes to see how much a policy costs. Drivers should also check how much coverage is available for the price and quality of the insurance company’s customer service.

On rare occasions, some companies offer car insurance discounts to drivers of electric vehicles, so be careful. Drivers may also save by enrolling in optional programs such as usage-based auto insurance that monitors driver behavior and offers discounts for safe and infrequent driving.

Finally, if that doesn’t work, the driver can raise the deductible and lower the premium. This will result in a higher out-of-pocket expense in the event of a claim, but the driver will be able to save this in an emergency fund so the accident won’t cost their wallets.

Hopefully, as electric vehicles become more common, the cost of these vehicles will drop and more mechanics will be comfortable working with them. Then electric car insurance premiums may not be so high. But for now, the above tips are your best bet for protecting your electric car on a budget.