The most recent study from the International Energy Agency (IEA) reveals that sales of electric cars have increased by an astounding 40% year-on-year, reaching a new all-time high of 2.1 million units worldwide in 2019. In 2010, there were around 17,000 electric automobiles on the road throughout the globe; by 2019, that number is expected to reach 7.2 million.
The vast majority of potential purchasers are aware that electric cars initially have a higher purchase price despite their superior fuel economy and less negative effect on the environment. However, some individuals are unaware of how owning an electric vehicle might influence the price of auto insurance. Let's look at the ins and outs of insuring electric cars so that you may be prepared for any surprises that may arise when it comes time to revise your policy after making the transition.
Does It Cost More To Insure Electric Cars?
The conclusion that having an electric vehicle provides a larger liability risk than owning a gas-fueled automobile has not yet been reached by insurers. Insurance plans for electric automobiles are the same as those offered for standard vehicles since they do not need additional coverage. However, some estimates estimate that those who drive electric vehicles often have higher insurance costs, which may average an additional $442 per year. The disparity is probably because electric automobiles are often sold at a higher price than their comparable conventional vehicles. When you insure an electric car, you may keep the liability limitations on your policy the same. Still, collision and comprehensive insurance (which cover damage to your vehicle) may cost extra due to the higher price tag of the vehicle.
Due to the unique components of electric and hybrid vehicles, collision insurance may also be more expensive in the event of a collision. This is because these vehicles may need factory-authorized repairs. As more information on collisions involving electric vehicles is collected, insurance firms may begin to see them as posing a greater risk. In 2018, the federal government adopted minimum sound regulations for hybrid and electric cars to help avoid accidents like this.
Typical Costs of Electric Car Insurance
To give you an idea of what you would be able to anticipate spending, we contacted the two private passenger vehicle insurers with the greatest market share. We asked for estimates for a policy that would cover three electric cars for six months (affordable, mid-range, and luxury).
We used an example profile of a motorist who lived in Minnesota and was 35 years old. She drove 12,000 miles per year and had a spotless driving record. We used this profile to get quotations from several insurance providers. We chose coverage that would allow us to satisfy the state's minimal insurance requirements, which meant that we had to get collision and comprehensive insurance with deductibles of $500 each.
Where to Get Insurance for an Electric Car
The vast majority of insurance companies that provide coverage for conventional automobiles also offer coverage for electric and hybrid vehicles. These organizations include regular carriers such as State Farm, GEICO, Allstate, and Liberty Mutual. Additionally, Tesla now provides insurance for its cars in California, and the company has ambitions to extend to other states.
It's possible that your homeowner's insurance premium could go up if you put a charging station for cars in your garage or driveway. Certain states require homeowners and condo owners to have liability coverage for the charging equipment. Some underwriters may want to see photographs or paperwork verifying the unit was placed correctly. Before installing a charging station in your house, you should first discuss any prerequisites with the representative of your homeowner's insurance company.
Offsetting the Costs of an Electric Vehicle
According to research conducted by Consumer Reports, owners of electric vehicles may save anywhere from $800 to $1,000 a year on gasoline costs while charging their vehicles at home. It has been shown that modern electric cars with extended ranges retain their value better than gas-powered ones do. 12 The Energy Department of the United States provides a helpful comparison tool that demonstrates the amount of money one may save on fuel by making a change. Additionally, owners of electric vehicles are eligible for additional financial benefits. Your electric car's safety technology (such as a collision-avoidance system and automatic braking, for example) may translate into additional savings for you when it comes to your auto insurance premiums. This is in addition to the typical discounts insurers offer for having multiple policies and going claim-free.
17 Other communities, such as Cincinnati in Ohio, Santa Monica, and Hermosa Beach in California, and Hermosa Beach in Hermosa Beach, California, provide amenities such as free parking. 181920 On its website, Tesla provides a comprehensive list of financial incentives for electric cars from various sources, including federal, state, municipal, and utility companies.
