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Buying electric car insurance is the same as getting insurance for a normal car.
Insurance for electric cars tends to cost more due to EVs' higher price tags and specialized parts.
The best way to save on electric car insurance is to shop for discounts.
Shopping for an electric vehicle can be an exciting time in your life, but finding electric car insurance usually isn’t. While you’re dreaming about trim levels, color options and all the money you’ll save avoiding the pump, car insurance is probably the last thing on your mind.
If you’re a first-time EV buyer, you may be surprised to find that the cost to insure your new battery-powered ride is higher than your gas guzzler — sometimes by a lot.
For example, when NerdWallet analyzed 2023 Tesla car insurance rates, we found that the national median rate for a 2023 Tesla Model 3 was $2,574 per year for full coverage insurance. That’s almost 45% higher than the national median cost of car insurance.
High electric car insurance costs can add financial stress to an already expensive purchase. Here’s what you should know.
Why is electric car insurance so expensive?
Buying insurance for an electric car is no different than for a gas car. The same coverage types generally apply to both.
So then, why is electric car insurance more expensive? It mostly comes down to costs:
Sticker price. EVs come with heftier price tags than their gas-powered counterparts, mainly due to the batteries that power them. While replacing a high-powered gas engine can cost up to $10,000, replacing electric car batteries can cost upwards of $20,000.
Specialized repairs. EVs require specialized repair equipment and mechanics. So if you need repairs after an accident, chances are you’ll have to take your electric car to an EV-certified location.
Higher price tags and fewer repair shops mean steeper insurance premiums since insurers have to shell out more money to repair or replace your electric car if it gets wrecked or stolen. Your insurance company may also have to pay more for a rental car since your EV could sit in the shop longer than a gas car typically would.
How can I save money on electric car insurance?
Many factors in pricing an auto insurance policy are outside your control. Still, there are a few things you can do to get a better price:
Shop around. Car insurance quotes can vary greatly from one company to the next. That’s why shopping around with at least three different companies is often the best way to get a lower price.
Ask about discounts. Many insurers offer a menu of car insurance discounts you may qualify for — but you don’t always know until you ask. For example, some insurers offer a discount for driving an electric car.
Raise your deductible. A deductible is what you pay upfront before receiving a payout from your insurer after an accident. You typically can raise or lower any deductibles on your policy. A higher deductible means lower premiums (i.e., more cash in your pocket). Just be prepared to pay more out-of-pocket if you ever need to make a claim.
Pay by the mile. Consider pay-per-mile insurance if you genuinely don’t expect to clock many miles in your new EV. With pay-per-mile insurance, you pay a monthly base rate plus a per-mile rate. This could save you a lot of money if you’re hardly behind the wheel (maybe you work from home or rely primarily on public transit). Not all companies offer this type of insurance, and those that do might not provide it in your state.
Where can I get electric car insurance?
Because auto insurance companies currently don’t require a special policy for EVs, many will be able to provide a quote for your electric car.
You can contact insurance companies to get quotes or use NerdWallet’s car insurance comparison tool to help get you started. Another option is to reach out to an insurance broker or independent agent. Brokers and independent agents work with multiple insurers to track down the best policy for your needs.
If you’re a Tesla owner, you have an additional option: Tesla Insurance. It is available for new and current Tesla owners for both Teslas and non-Tesla vehicles. It uses drivers’ real-time driving behaviors and other factors to generate a new monthly premium. However, Tesla Insurance isn’t available in every state.
NerdWallet looked at median insurance estimates from the largest insurers in all 50 states and Washington, D.C., for the base 2023 Tesla Model S, 3, X and Y.
Rates were for 35-year-old male and female drivers with good credit, no tickets or violations, and with the following coverage limits:
$100,000 bodily injury liability coverage per person.
$300,000 bodily injury liability coverage per crash.
$100,000 property damage liability coverage per crash.
$100,000 uninsured motorist bodily injury coverage per person.
$300,000 uninsured motorist bodily injury coverage per crash.
Collision coverage with $1,000 deductible.
Comprehensive coverage with $1,000 deductible.
In states where required, minimum additional coverages were added. Some policies include additional coverages at the insurer’s discretion. These are sample rates generated through Quadrant Information Services. Your own rates will be different.