Let’s go back to the time when hearing the word “electric car” elicited the same response as the word “flying car”. People considered it to be possible, even commercially usable to some degree, but electric cars with reasonable range were just a dream. Cut to under a decade later and electric cars are not only being used (and preferred) everywhere, but they are soon going to overtake (literally and figuratively) gas-powered cars.
Electric cars are much better than gasoline-based cars in every way. They are faster, snappier, safer, and most importantly, do not cost a fortune to operate. They do not produce any pollution and with the coming of Tesla, with just a single charge, you can go to Baltimore from DC and come back, four times!
But there is one thing that may be considered a drawback of electric vehicles. This article will describe in detail whether having an electric vehicle affects your car insurance rates. Let’s get started.
Does Having an Electric Car Affect Auto Insurance?
Just like getting an electric car would be slightly more expensive than getting a normal, gas car, auto insurance policies for electric cars are also comparatively more expensive than gas cars. So you will have to shell out more money to insure your electric car than a gas car. But why is there a price difference in auto insurance rates? And which policies are the most expensive for electric cars? Let’s take a look.
Why Electric Cars Cost More to Insure
Your auto insurance rates depend on multiple factors. All the factors that the auto insurance company considers affect the chances of you getting in an accident and making a claim, along with the cost of repairing your car or reimbursing you for it.
So if the chances of you getting in a car accident is high, or your car is more expensive to own, repair, or reimburse, then the auto insurer will charge you more for the auto insurance policies.
Along with your driving record, past insurance claims, locality, gender, and age, car insurance companies look at the make and model of your car. Expensive, foreign-made cars such as luxury cars, sports cars, or SUVs not only cost more, but they are also more expensive to insure. The same goes for electric cars.
Reasons Why Electric Cars are Expensive to Insure
Although more common today, electric cars are still a minority on the roads. There are only three or four companies that make commercial electric cars, which limits the production units (the less they make, the more expensive it will be). Along with this, since there are not many electric cars, there is also a lack of spares and other parts needed to repair the car.
Since these cars are designed and manufactured in a completely different way, they require highly skilled mechanics to fix and repair them. This limited availability increases the cost of repairs. This added with limited availability of spare parts, and the battery pack being one of the most expensive units of the car, it can cost a fortune to fix an electric car that’s been in an accident.
Another reason why electric cars are more expensive to insure would be very expensive spare parts. Since these cars are very high on technology and use composite materials to lower the weight, along with minimal moving parts, fixing even a minor thing in an electric car could result in a massive bill. For example, it could cost almost a thousand dollars to fix a windscreen crack of a Tesla.
So in summary:
- Electric cars are expensive
- They cost more to reimburse
- Spare parts are limited
- Less moving parts
- Battery packs are expensive
- Require highly skilled mechanics
So a totaled or damaged electric car would be an auto insurance company’s nightmare. So to make sure this nightmare does not break their bank, auto insurance companies charge people more money both for auto insurance and insurance premiums.
Which Policies Cost More?
Liability Coverage: Liability coverage is the mandatory policy that you are legally required to have to operate any vehicle in the US. This coverage will pay for the medical treatments and repairs of the car of the other driver involved in an accident that’s your fault. So since liability coverage is not claimable by you, it does not matter what car you own, the price would be only affected by your driver record, past insurance claims, etc.
Collision Coverage: Collision coverage is one of the most expensive auto insurance policies, and when it comes to electric cars, the price could go even higher. Collision insurance will cover the cost of repairs to your vehicle, whether you crash it with another car or crash into a pole or a tree. Any collision accident, while you are driving the car, will be covered under this policy.
It is very difficult to find the cheapest auto insurance for collision coverage but compare every auto insurance company and choose the best coverage for your car. Saving money on collision coverage would greatly reduce the cost of insuring your electric car.
Comprehensive Coverage: Comprehensive coverage covers the cost of repairs for damages caused by natural calamities and other accidents that you are not involved in. For example, if your car is parked and a tree falls on it, it will be covered under comprehensive coverage.
Other damages that are covered under this policy include damages due to:
- Projectile damage
Comprehensive coverage rates are directly affected by the make, model, and cost of the car. So getting this insurance policy for your electric car would be expensive. However, if you keep your car in a secure garage, then you can skip this policy.
While ensuring electric cars is an expensive affair, with the rising popularity of electric cars, soon the prices will go down. But for now, be happy with your electric car and the money it saves on gas.