Everything you need to know about insuring an electric vehicle

Unlike their conventional siblings, electric vehicles don’t depend on combustible engines. Instead, when you pop the hood of an electric car, you’ll see an electric motor, powered by a massive battery pack, often located in the undercarriage of the vehicle.

Robert Anderson invented the first electric car in 1832, but only in recent decades have electric cars become major contenders in the automobile industry. In the past, electric cars could only travel short distances on a single charge – 100 miles or less – and most consumers couldn’t afford the lofty sticker prices. But today, many electric vehicles cost less than $40,000 and some have a range of more than 370 miles on a single charge. Setting up a home charging station costs just $200-$1,000, and you can juice up on the road at pay charging stations from coast to coast.

Car enthusiasts choose electric cars for many reasons. Some buy them because of their environmentally friendly reputation, and other people switch to electric automobiles to save gasoline dollars. But is an electric car right for you? Whatever your reason for considering this option, you should know about how to get an electric vehicle insured.

 

Electric car insurance vs. conventional car insurance

Typically, electric cars have higher insurance rates than their conventional equivalents.

Coverage for electric vehicles is higher because they cost more than conventional cars, sustain damage more easily and cost more to repair. So, if you total an electric car, the insurer must pay a higher claim compared to the payout for an equivalent conventional automobile. And, if a fender bender damages an electric car’s battery pack, the insurance carrier may have to pay $15,000 or more to replace it.

 

How much does electric car insurance cost?

Although electric automobiles typically cost more to insure than their gas-guzzling counterparts, we requested quotes on several makes and were pleasantly surprised at the affordable rates we received.

 

 

Who provides electric car insurance?

Insuring an electric car is no different than covering a conventional vehicle. Electric car policies feature the same standard coverages such as liability, collision and comprehensive coverages. Most major insurers write policies for electric vehicles, including:

 

Tesla Insurance

In August 2019, electric vehicle manufacturer Tesla launched Tesla Insurance. Currently, Tesla Insurance only writes insurance policies for California Model 3, Model S, Model X and Roadster Tesla owners and has plans to offer coverage throughout the United States. Tesla marketing claims the manufacturer launched the Insurance program because of the company’s intimate knowledge of the vehicles’ technology and serviceability.

Tesla Insurance offers the same standard coverage as other providers, including bodily injury and property damage liability, collision and comprehensive insurance. Tesla also offers an Autonomous Vehicle Protection Package that includes autonomous vehicle owner liability, cyber identity fraud expenses, electronic key replacement and wall charger coverages. Although some insurance providers don’t cover autonomous vehicles, a report by the Stevens Institute of Technology suggests the coverage could create an $81 billion opportunity for the insurance industry within the next five years.

Current California Tesla owners can request an online quote and purchase a policy on the Tesla website. New owners who order a new Tesla can get a quote when their vehicle’s VIN number becomes available in their Tesla account.

Like most car insurance companies, Tesla Insurance offers multi policy discounts. Tesla Insurance claims to offer rates 20 to 30 percent lower than their competitors, but the results are mixed. Some Tesla owners may get lower rates with Tesla, but others may pay more. We requested a quote from Progressive for a Tesla Model S and received an annual rate of $1,550, compared to the annual Tesla Insurance rate of $2,963.

Tesla does have discount programs available. If you use the autopilot feature, you can save money. The company will also use data from your car about your driving habits to consider if you’re eligible for safe-driving discounts.

 

How to save on electric car insurance

If you join the electric vehicle craze, you can save on insurance the same way conventional car owners do: avoid accidents and traffic violations and maintain a good credit score. If you already have an electric car and are unhappy with the insurance rate you pay, request quotes from several other providers. You might get a better deal by switching to another company.

You can also take advantage of discount programs. Insurers offer all types of discounts for purchasing multiple policies, insuring more than one vehicle, remaining claims free and taking a defensive driving course, among many others. Some large carriers, including Travelers and Liberty Mutual extend exclusive discounts to electric and hybrid car owners.

Also, research local, state and federal programs that offer rebates or tax credits. For instance, the California Clean Vehicle Rebate Project pays rebates up to $4,500 to Californians who purchase a qualified electric vehicle. The federal government offers tax credits up to $7,500 for purchasing certain makes and models of electric cars and SUVs.

 

What are the benefits of driving electric vehicles?

Owning an electric vehicle has more benefits than you probably thought. Here are just a few.

  • Energy independence: While you must rely on a charging station to recharge your vehicle’s battery, you can say goodbye to gas stations. With a home charging station, you can plug in your automobile when you get home from work and it’ll be ready to go the next morning.
  • Lower environmental impact: Electric automobiles produce no tailpipe emissions. However, driving an electric car doesn’t completely eliminate your transportation carbon footprint, because nearly 63 percent of the United States’ electricity is generated using fossil fuels.
  • Reduce inhaled emissions: Tailpipe emissions don’t just poison the environment; they also pollute your car’s interior. When driving a conventional automobile, emissions seep into the interior from your engine. The level of pollutants varies, depending on factors such as the type of car you drive and its climate control system. Car emissions contain many dangerous carcinogens, including volatile carbon oxides, organic compounds and particulate matter. An electric car can help you avoid breathing in these emissions.
  • Reduce fuel expenses: Typically, fueling an automobile with gasoline or diesel costs more than the electricity expenses of operating an electric vehicle.
  • Extended battery life: Reports about electric car batteries vary widely. However, based on predictive modeling conducted by the National Renewable Energy Laboratory, new technology has extended the life of some types of batteries up to 12 to 15 years.
  • Reduce maintenance expenses: With an electric vehicle, you don’t need to worry about regular oil changes or periodically changing incidental parts such as fan belts, gaskets and radiator hoses. Some electric car owners have even reported driving their vehicles 70,000 miles or more on original brake pads.

 

Bottom line

There’s no doubt that electric cars are here to stay. They offer an environmentally friendlier way to get from one point to the next, quieter engines and none of the nasty exhaust fumes. Typically, electric cars require less regular maintenance and can go an astounding number of miles on original parts.

The sticker price of an electric car might set you back a little more, and you may pay slightly higher insurance rates. But you might be surprised. When you take the time to shop around, you can often find rates comparable to many conventional automobile makes and models. To achieve the best premium possible, ask agents about discount programs, including discounts for electric vehicles.

 


 

Fact-checked with HomeInsurance.com

Source: https://www.bankrate.com/insurance/car/electric-car-insurance/