EV car insurance: is it more expensive?

Electric vehicles continue to gain in popularity: Sales of EVs accounted for 16.3% of all light-duty vehicles in the U.S in 2023, according to Consumer Reports. That's up from 14% in 2022 and about 9% in 2021.

Sales of plug-in hybrids, which run on electricity until the battery is nearly depleted and then switch to an internal combustion engine, grew 60% between 2022 and 2023.

Prices continue to come down, as well: In 2022, the difference between a new EV and a new gas-power car averaged $17,000, according to Kelley Blue Book. In February 2024, the difference dropped to just $5,000.

But how does that play out when it comes to auto insurance?

CNBC Select reviews what you need to know when shopping for insurance for an electric vehicle.

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EVs are insured by the same policies as gas-powered cars and, in principle, you're not charged more simply for driving an EV. But they have higher sticker prices, repairs cost more and fewer repair shops work on them, so monthly premiums can be higher.

According to the National Association of Insurance Commissioners, insuring an EV can cost up to 20% more than a gas-powered car. 

But even that is changing.

"When [electric vehicles] were newer, there were fewer repair shops [that could handle them]," Janet Ruiz, director of strategic communications at the Insurance Information Institute, told CNBC Select. "The batteries alone were quite a bit more expensive."

As EVs have become more ubiquitous, Ruiz added, "we're seeing insurance for electric cars come closer to those for gas-powered cars."

The cost to cover an EV can still vary widely: According to data from Bankrate, a Chevrolet Bolt costs an average of $2,000 a year to insure a Chevrolet Bolt, while a Tesla Model X would cost $4,300 for the same coverage.

The cost of car insurance isn't only determined by the vehicle, Ruiz said. "A lot of other variables go into the price of your insurance for your auto." 

Other factors that influence the price you'll pay to ensure any vehicle include your driving history and behavior, annual mileage and (in some states) your credit score.

Generally speaking, EV drivers can use the same tactics as any other driver to lower their rates, including:  

Look for an EV discount

Geico, Nationwide, State Farm and USAA all offer a discount of up to 10% for driving an EV.  

Bundle home and auto insurance

Most insurers offer a discount for bundling your auto insurance with your home or renters insurance.

Allstate offers a discount of up to 25% when you bundle. Other add-ons include accident forgiveness, a safe-driving bonus that renews every six months and a $100 credit off your collision deductible for each year with no driving violations.

Increase your deductible

Your deductible is the amount you pay out of pocket before your carrier pays for anything. Generally, the higher your deductible, the lower your premium. If you have a clean driving record with no accidents, you may want to think about increasing your deductible. Consider your financial situation first, though, since you'll have to shell out more if you're involved in an accident.  

Improve your credit

In all but four states (California, Hawaii, Massachusetts and Michigan), insurance companies use credit scores to help determine rates. Drivers with poor credit pay twice as much on average for a policy than those with excellent insurance, according to a 2023 report from the Consumer Federation of America.  

Insuring an EV isn't much different from insuring a gas-powered car, though you might find that some companies offer better EV-specific discounts or other benefits.  

Travelers Auto Insurance offers a discount of up to 10% for hybrid and electric cars. That's in addition to more than a dozen other discounts, including for cars under 3 years old and for getting a quote before your current policy expires.  

Lemonade also has an EV discount, as well as coverage for home charging stations and portable EV chargers. Lemonade's roadside assistance plan also includes tows to charging stations.

While EVs have been more expensive to insure, the gap is closing as prices drop and more garages are able to repair them. To get the best price, compare rates and look for carriers that offer discounts for electric cars.  

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Janet Ruiz, director of Strategic Communication for the Insurance Information Institute. She has 25 years of insurance industry experience and is based in the San Francisco area.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best car insurance.

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