With longer range and lower sticker prices, electric vehicles (EV) are becoming more accessible to the average buyer. A wide variety of models hitting the market demonstrates that the EV is going mainstream. Legacy brands like Chevrolet, Honda, Nissan, Volkswagen, Audi, BMW, Mercedes-Benz, and Jaguar are joining upstarts like Rivian, Tesla, and Lucid in the EV segment
You may think the time is right to jump into EV ownership. But is EV ownership the same experience as it is with an internal combustion engine (ICE)? Or is there more to it? While there are advantages in less routine maintenance like oil changes and tune-ups, there may be other hidden costs of ownership not on your radar, like insurance.
What’s the policy?
At first glance and after discussions with insurers, it appears EV insurance policies will be similar to those found for ICE vehicles. That means you’ll be paying for liability, as well as comprehensive and collision coverages. But there may be added costs in repairing an EV over a conventional vehicle, especially if it involves the battery pack. Some of those costs may be lessened through government tax credits, though this $7,500 incentive is no longer available to makes like GM and Tesla, which have crossed the 200,000-unit threshold.
Other non-EV factors figure into your insurance rate, including your age, where you live, and your driving record. A lack of traffic violations and the absence of accidents that were your fault will result in better rates that could save you a substantial amount of money.
How you drive may cost you more than what you drive
“Two factors go into calculating insurance rates — how you drive and what you drive,” said Jason Wrather, an AVP for Grange Insurance. “A customer driving a Tesla Model X ($81,000) will likely pay more than they would for a conventional motor vehicle. In that case, the customer’s insurance rate could be higher since the cost to repair that electric vehicle is typically more,” he said. “But make no mistake; most automakers are now making electric vehicles at a more affordable price point, which means that the insurance rate for an electric vehicle may not be higher.”
Other savings may come from safety technology on board. Like conventional motor vehicles, many EVs come with radar sensors, collision avoidance, and automatic braking. Insurers offer other ways to save, including accident forgiveness, multi-vehicle discounts, vehicle telematics discounts, and more. Still, other coverage questions may arise due to the nature of EV technology. Here are a few:
Do I need extra home insurance if I have a higher voltage Level 2 charger?
Michal Brower of State Farm Insurance said, “there is no need for additional coverage because of a high-voltage charger in the home.” Grange’s Wrather went further to say, “we may require photographs that document the installation’s quality and that proper safety procedures were exercised during installation.”
Are there any additional liability risks to owning an EV?
Electric vehicles sometimes make no noise at all. And pedestrians don’t even realize a vehicle is approaching from behind. That’s why EV drivers need to be vigilant when behind the wheel, and the government began phasing in guidelines this year to require these EVs and hybrids in EV mode to make some noise at speeds below 18.5 mph. So far, there’s been little data to support that EVs are a greater risk that requires higher premiums.
Should I talk with my agent before purchasing an EV?
Yes. There are as many levels of coverage available as there are EVs in dealership showrooms. You may find the expensive high-range luxury EV may not make as much financial sense as one that costs less. The more expensive a car, the higher the premiums to insure its repair or replacement.
Are there any special provisions for roadside assistance for EVs?
Roadside assistance helps assist you with breakdowns, flat tires, or if you run out of gas. Some carriers allow for the transport of EVs to a recharging station. Check the insurer’s policy for these provisions.
If repairs are needed should I have my EV flat-bedded?
There’s no telling what hazards are on the road these days. Potholes, steep drives, and other obstacles can all potentially damage a vehicle, or its batteries, on the way to a dealership repair. For that reason, we recommend, wherever possible, having your EV flat bedded to the right repair center.
As electric vehicles become more mainstream, buyers should prepare and research before signing on the dotted line. You can consult with other owners, EV experts, and check sites like AutoTrader.com to ensure a surprise-free Electric Vehicle buying experience. Find an EV for sale near you