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Electric cars are more expensive than their internal combustion counterparts. But rarely mentioned is another EV expense, which is insurance coverage. You can’t control the price you pay for an EV. But unlike that cost, there are ways you can keep your insurance costs as low as possible. 

Why is EV insurance more expensive?

Electric vehicle accident
Damaged Tesla on a tow truck after a collision | Getty

Because components for EVs are costly, when you get in an accident, the insurance company pays more for those parts. And in many cases, collision shops do both cosmetic and mechanical repairs. Some collision centers aren’t qualified to make electric vehicle repairs. That means specialized shops are needed.

Because they’re specialized, they command a higher per-hour charge. All of these extra expenses aren’t absorbed by insurance companies, they’re passed onto you. And over time, those shops that expand into EV repairs aren’t going to revert back to charging the same as pre-EV days.

How can you reduce EV insurance costs?

EV crash
A Tesla stands after an accident | Getty

With liability protection, required by every state, the costs are irrelevant to the damage your EV receives. But collision and comprehensive coverage are what pays for damage to your car. So what are the parameters that determine what collision/comprehensive costs should be?

Insurance companies look at different metrics to determine this type of coverage. Things like the kind of car being insured, your ZIP code, and your driving record also contribute to what the insurance companies determine you’ll be charged. But each insurance company gives each of these categories a different emphasis, so insurance premiums differ from company to company. 

There are discounts for EVs, you just have to ask

accident aftermath
Workers clean up accident debris | Getty

That’s why it is best to get quotes from different companies, to be able to compare different rates. You can even determine what some companies will charge online, with tools provided on their websites. But there are other factors you should also be looking at besides the bottom line. The amount of coverage and the insurance company’s customer service record should also be a factor in your decision.

Surprisingly, there are insurance companies that give discounts to electric car owners. According to Motley Fool, there are also programs like usage-based car insurance. They monitor the behavior of the driver and also how often he or she drives. These programs factor infrequent driving.

There is still another thing you can do to keep costs down. You can increase your deductibles, which lowers your premiums. But be aware that this increases what you’ll pay to fix your EV should you experience an accident. Experts suggest an emergency fund can cover accident expenses. Of course, in this ever-increasing cost atmosphere we’re in now, that can be a difficult thing to do.


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