Insuring an electric car? Here's what you need to know before buying coverage – CNBC

Electric vehicle (EV) popularity has surged over the past several years, and seeing an electric vehicle on the road is no longer a rarity. If you’re thinking of making the switch yourself, CNBC Select breaks down what you should keep in mind when shopping for insurance.

While electric cars used to be much costlier to insure compared to their gas-powered counterparts, the gap has recently narrowed. “When [electric vehicles] were newer, there were fewer repair shops. The batteries alone were quite a bit more expensive,” says Janet Ruiz, director of strategic communications at the Insurance Information Institute.

But as costs have come down — the Department of Energy estimates that the cost of battery packs decreased about 90% between 2008 and 2022 — insurance costs have followed suit. “As the vehicles become more popular, we’re actually seeing insurance for electric cars come closer to those for gas-powered cars,” says Ruiz.  

It’s worth noting that the cost to cover your EV can still vary widely depending on its type. According to data from Bankrate, a Chevrolet Bolt driver would pay an average cost of about $2,000 per year for full coverage, while a Tesla Model X owner would pay about $4,300 per year for the same coverage. The site estimates that the average U.S. driver pays about $2,014 per year for full coverage car insurance.  

Car insurance pricing isn’t only about the vehicle that’s being driven. “A lot of other variables go into the price of your insurance for your auto,” Ruiz says.  

Factors including your driving history and behavior, annual mileage driven, and even your credit score (in some states) can influence the price you’ll pay for electric vehicle coverage, or any other car insurance you may be shopping for.  

Generally, EV drivers can use the same tactics that any other driver could use to lower their car insurance costs, including:  

• Raising your credit score. Those with lower credit scores may pay more for car insurance coverage than those with higher credit scores.  
• Increasing your deductible. In car insurance, your deductible is the amount you pay before insurance covers the rest. Generally, the higher your deductible, the lower your premium. Consider your financial situation overall before making this move — you’ll need to make sure you could easily afford this cost if you were involved in an accident.  
• Looking for discounts. Some car insurance companies offer discounts for electric vehicle drivers, which could help lower your premiums.  
• Bundling your home and auto insurance. Whether you rent your home or own it, bundling your homeowners insurance or renters insurance with your auto insurance coverage could help you save.

Insuring your electric vehicle shouldn’t be too different from insuring a gas-powered car. However, you might find that some companies offer better EV-specific discounts or other perks.  

Travelers Auto Insurance, for example, has a discount for hybrid and electric cars. That’s in addition to other discounts that could be useful, such as a new car discount for cars fewer than three years old, and discounts for getting a quote before your current policy expires.  

Lemonade is another option for electric vehicle insurance, as the company offers coverage for home charging stations and portable chargers. The company’s roadside assistance program can also assist with towing your EV to a charging station if you run out of battery on the go.  

Electric vehicles are insured much like any other car. While they have been known for being more expensive to insure, the gap is closing between gas-powered cars and EVs as they become more common and battery technology evolves. To get the best price on EV insurance, shop around and compare several policies and look for companies that offer relevant coverage and discounts.  

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 Bay 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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