Recently a friend of mine was looking into buying a used Tesla. He then checked the insurance costs and changed his mind. To his surprise, he would have paid over $700 more per year to cover a Tesla than what he was currently paying to insure his SUV. Many people shopping for EV or electric cars ask, are they more expensive to insure than regular cars? The answer to that question at the moment is a resounding yes. However, there’s good news for those consumers looking to go green and cut the gas pump. Rates are coming down and they may be equal to gas-guzzling vehicles in a few short years.
Electric cars and trucks are popular for many reasons. One is they are for the most part inexpensive to run, because of the relative cost of electrical energy, as opposed to the cost of gas or diesel. There are also tax incentives buyers can take advantage of that makes buying one a smarter financial decision. For now, agents suggest that insuring hybrid or electric automobiles can be a lot pricier than insuring a gas-powered vehicle.
Early adopters of electrical vehicles such as the Nissan made Leaf and the Tesla Roadster reported customers had difficulty getting affordable insurance coverage for their EV cars and trucks. This was mainly attributed to the fact that insurance companies had no historic data to base premiums on. They also had to estimate the cost of repairing EV cars and the overall replacement costs. This made a lot of insurers price this uncertainty into their premiums. Some disgruntled early Tesla customers in many cities paid about double for insurance, even good drivers with no accident history.
Rates for Insuring Electric Vehicles are Coming Down
As electrical vehicles become more commonplace and there is more information for the expense of repairs, so more insurance companies have actually entered the market. This marketplace competition has driven down costs in the last couple of years. It has likewise helped rates to drop as EV vehicles get stolen a lot less than other types of automobiles. This isn’t to say that Tesla’s don’t get stolen, but at a lower rate than other gas-powered cars like a Honda Accord or Toyota Camry.
Another reason why rates are coming down is Tesla owners generally drive safer. They put so much money into owning a Tesla in the first place and the last thing most owners want to do is go out and crash their beloved Tesla. Fewer EV accidents result in lower auto insurance rates. While it’s still is expensive to insure a Tesla, new prospective owners should be happy to know that rates are dropping year by year.
According to the popular auto insurance site DirectAutoInsurance.org, monthly auto insurance costs for a Tesla Model X is about $200. For the Tesla Model S, rates are about $230 on average per month. This is not that much higher than other luxury vehicles, like a BMW 7 series or a similar Mercedes. In fact, some luxury cars are now more expensive to insure than most Tesla models.
Improved Safety Features Have Helped Drive Down Electric Vehicle Insurance Rates
Another reason why Electric vehicle insurance cost has come down is due to the fact that repair facilities have gained the necessary expertise in how to fix the cars. Another plus is that there’s a fewer complex moving parts that can be harmed compared with a typical gas power engine. In addition, the battery packs, which are the single most expensive part of an electrical automobile, are reasonably well protected in the event of an accident. this decreases the costs of an expensive replacement, although in serious accidents they still get seriously damaged.
Go Over Your Policy Carefully
It’s smart to always read the fine print and this is especially true when it comes to insuring an electric vehicle. Make sure the insurer is definitely clear on what’s covered by any policy since it can vary quite a bit. Also, it’s easy for owners to ignore the requirement to cover some of the additional equipment that is featured in most EV automobiles. Make sure your policy covers things like the battery being damaged from a catastrophic natural event, like flooding or fire. If you are not sure what type of policy to get for an EV car, talk to a qualified agent, and compare multiple quotes, so you can get the best rates possible.
So, rates for electric vehicles still remain high and cost more than most gas-powered cars, but rates are coming down fast. In the near future, rates for EV vehicles could be equal to or even lower than gas-powered automobiles. With the low cost of energy and falling insurance costs, more people than ever are turning to electric vehicles, not just to save the environment, but to save money.