Is EV Car Insurance More Expensive?

Everybody is scrambling to adapt to the EV wave sweeping the world of motoring. But as we race towards the crest, one question might be nagging at your heels (or tailpipe): the cost. Upfront, long-term, emotional, and physical. In this article, though, we’ll be discussing something more tangible: whether or not insuring an EV is more expensive than a traditional ICE car. Let’s dive into details.

The Anatomy of EV Car Insurance Costs: What’s the Difference? When insurers set their rates, they look deeper than what’s beneath the hood. They evaluate the vehicle’s worth, repair costs, safety credentials, and, of course, the driver’s history. For electric vehicles, several factors come into play.

1. Value and Repair Costs: The Price of Technology

Electric vehicles carry a higher upfront price tag due to the technology and expensive components required to make them run. For example, the battery pack of an EV alone can cost more than $20,000. It’s not your typical Duracell double A. Repairing sophisticated parts isn’t cheap, and your insurance costs will reflect that with higher replacement and repair costs in premiums.

2. Battery Replacement

The battery is the life of an electric vehicle. While warranties often cover them for years, eventually your battery will need a swap. Insurers like to factor in potential trips to an EV battery swap station when setting premiums, making sure they’re prepared for any eventuality.

3. Safety Features: Silent, Not Deadly

Electric vehicles represent peak automotive safety. Equipped with features like automatic emergency braking, lane-keeping assistance, and collision warning systems, EVs are designed to protect. This advanced safety tech can tilt insurance rates in your favor as an EV driver. Moreover, data suggests that EV drivers tend to drive more cautiously, which insurers appreciate. Nothin’ like being rewarded for your preference.

The Incentive Imbalance: EVs vs. Gas Cars

While the raw, upfront numbers might suggest higher premiums for EVs, it’s essential to look at the full picture. Discounts and incentives can make a real difference in your bottom line.

1. Discounts and Incentives From Insurers: With insurers starting to recognize the value of EVs, some offer reduced rates for home charging stations or participation in eco-friendly driving programs. These incentives can help offset the higher premiums, making the transition to electric less consequential.

2. Regional Variations: Insurance rates aren’t just about the car; they’re about where you drive it. Regions with more electric vehicles might offer more competitive rates. In the same vein, driving in areas with deeply ingrained EV infrastructure can also have a happy impact on your premiums.

EV Conversions: What Happens to My Insurance?

As for EV conversions, many car enthusiasts are gutting their beloved gasoline-powered relics and filling them with lightning. But after this complex, expensive, and immensely rewarding experience, how is their insurance impacted?

Insurance Considerations After Implementing Electric Car Conversion Kits

Insuring a converted EV can be a mixed bag. On one hand, the value of the converted vehicle may increase due to the cost of the conversion and the added technology. Additionally, the lifespan of your car can be doubled or even tripled, saving you tons of money in the long run.

On the other hand, the car's unique nature and potential lack of comprehensive safety features compared to factory-built EVs can lead to higher premiums. Insurers will have to assess the quality of the conversion, the parts used, and the overall safety of the vehicle. That’s why we recommend using professional EV conversion shops—you’ll integrate your beloved car with the next-generation propulsion and technology of a mainstream EV while maintaining its original soul and spirit (and saving on the cost of buying a whole new vehicle).

Many insurers also have special policies regarding unique cars that aren’t based on their book value. What happens when a classic car, driven less than a thousand miles per year, becomes a daily driver after electrification? USAA has a category for these cars that’s based on the value of parts and labor once completed.

The Verdict

So, is EV car insurance more expensive? Often, yes, but not prohibitively so. The higher repair and replacement costs are balanced by potential discounts, incentives, and insurers accounting for advanced safety features.

For those venturing into EV conversions, insurance can be more complex but just as rewarding. Most major carriers won’t delineate from major modifications or replacement value for an OE vehicle. Some will accommodate based on “agreed value,” but that’s not a guarantee of full money back if you convert a $500 Civic into a $30,000 electric street racer.

Additionally, increased insurance costs can be further balanced by state and federal rebates for both factory EVs and conversion projects.

We hope zooming out and understanding these factors won’t leave you, an unsuspecting EV enthusiast, blindsided by insurance costs. Now, you’re armed with the knowledge to navigate the landscape effectively, ready to put your foot down on the phone with your insurance rep. Maybe. Either way, we here at Fuel2Electric are your source for anything and everything EV related—get in touch with us today about conversion projects, questions, or compliments.