Does Electric Car Insurance Cost More or Less? Answering the Big Question
Electric cars will certainly revolutionize the transport sector in terms of how people will get around. That being said, they still need insurance similar to how other cars require insurance.
Despite electric vehicles having higher purchasing costs, a number of studies have shown that owning an electric car is cheaper in the long run.
Unfortunately, this case scenario does not apply when you’re discussing insurance. As a matter of fact, a majority of electric car insurance premiums are much higher!
Having a Look at the Different Electric Car Insurance Premiums Around
Stating boldly that car insurance for electric vehicles is more expensive than that of regular cars would be an incorrect generalization. That’s because there are a lot of factors involved.
For example, when looking at electric-only vehicles such as the Tesla Model 3 and the Chevy Bolt, you have to consider the comparison.
In a world where both gas-powered and electric-powered vehicles exist, there is a major issue when it comes to comparing both of them. That being said, purchasing an electric vehicle upfront is normally more expensive as compared to a gas-powered one.
As a rule of thumb, you can use, any car that costs $10,000 more while purchasing it will normally be more expensive to insure. Additionally, if your electric car is covered by a collision coverage and is totaled, its insurance claim for replacement will generally be higher than its contemporaries.
Analyzing the Data
In 2015, Nerdwallet conducted research and found that when analyzing versions of gas and electric vehicles, it was found that premiums in electric vehicles were 21% higher.
This was keeping in mind that the liability coverage was 100/300/50 and the collision coverage had a deductible of $500.
Another study carried out by Value Penguin used the same method. This time around, they compared the Chevy Spark, Kia Soul and the Ford Focus using the premiums of three different insurance companies. Indeed, they discovered that the premiums were higher by 23% for electric models.
Moreover, a recent study carried out by Compare.com found contrasting results. They discovered that there was no difference in terms of quotes for both gas and electric powered vehicles.
That being said, there are a few things that have to be considered when analyzing these numbers. For starters, some of the analyses that were carried out were a little out of date by a few years.
Moreover, these premiums utilized data from average insurance rates in certain circumstances. They made plenty of assumptions when it came to the home state of the driver, the age of the driver, as well as the history of his or her claims.
Additionally, the averages used in these quotes made an assumption that full coverage was used. That is there was collision, comprehensive, and liability coverage as part of the package. Hence, if an individual had only paid for one, it’s a given that these numbers would look pretty different.
So Does Electricity Play a Role in the Inflation of Car Insurance Premiums?
Perhaps the reason why the data looks so obscured is that the power option of your vehicle is just but one of the factors that determine the price of your premium.
As a matter of fact, there are quite a number of factors that play an important role when it comes to determining the different kinds of auto insurance premiums. There are factors such as your credit score, your claim history, your age, and whether or not you have a decent driving record.
That being said, even though you sample in factors regarding the vehicle, they might not play as an important as a role. As a matter of fact, electric vehicles tend to be much smaller and hence, do not provide as much protection during a crash. Perhaps this is one of the reasons why they have a higher insurance premium because they can be deemed a higher risk.
Some Positive News
However, Merrill Lynch analysts have predicted that electric vehicles in the US are expected to be much cheaper in 2024 as compared to their gas counterparts.
Additionally, even if you have bought an electric vehicle recently, the thought of a higher insurance cost should not put you off
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