Electric cars have become increasingly popular in recent years. Not only do they lead to significant savings in fuel and transportation expenses, but their just plain fun to drive.
As they say though, “There is no Free Lunch”. It’s important to consider all of the costs involved before purchasing an electric vehicle (EV). In this post we’ll explain some of the simple reasons why electric cars tend to be more expensive to insure compared to their gasoline-powered counterparts.
- Repair Costs: Electric cars often have a higher repair costs due to the specialized parts and technology involved. For example, if there is damage to the battery pack, it can be a costly repair and often needs to be replaced. According to JD Power, a battery for a Tesla Model 3 costs on average over $13,000 to replace. This, in turn, drives up the insurance premium for electric powered vehicles.
- Lack of Body Shops Specialized in Electric Cars: Body shops that specialize in repairing electric cars are few and far between, leading to a lack of competition in the market and a higher cost for insurance. Most traditional body shops and mechanics are simply not equipped to handle some of the necessary repairs. this leads to increased costs for specialized repair, and of course, added expense.
- High Sticker Price: Electric cars tend to have a higher sticker price compared to traditional cars, which can also affect insurance costs.According to KBB Many insurance companies are totaling electric vehicles that have only suffered moderate damage. Replacing a totaled vehicle is expensive, and naturally the higher the value of the car, the higher the insurance premium is likely to be.
- Advanced Technology: Electric cars come with advanced technology, such as autonomous driving, that can be costly to repair if damaged. This also drives up the insurance premium for these cars.
- Most of the added costs are for “full coverage”: Collision and comprehensive coverage are what cover these vehicles when their damaged. Interestingly, the liability costs for EV’s is very favorable. Most of the premium for these vehicles stems from the collision and comprehensive endorsements.
Electric cars are an exciting innovation that bring the promise of lower costs of ownership, and significant savings on transportation expenses. However these vehicles come with a unique set of insurance challenges that can lead to higher premiums. It’s important for car owners to understand these factors and plan accordingly when considering purchasing an electric car.
Eventually, the infrastructure to support the repair and costs involved with EV’s will mature, and thus lead to more competition and lower prices. But until that time, don’t be surprised if your EV may cost a little more to insure than you were expecting.
If your considering purchasing an EV, It’s always a good idea to compare insurance quotes from multiple providers to ensure you are getting the best coverage at the most affordable price. Lilac Insurance Group can handle this for you, and has access to carriers whom tend to be more affordable for electric vehicle owners. Contact us today to see how we can help you find the right insurance policy for your new ride.