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Electric Car Insurance Owner’s Guide

Before you take your ride out for a spin, don’t forget to get electric car insurance

Electric cars are becoming increasingly popular in the Northwest, with more than 66,000 registered electric vehicles in Washington alone at the beginning of 2022. The appeal of never again having to fill your gas tank is obvious but other perks include lower overall maintenance costs, government tax incentives and sleek modern looks. But before your take your new ride out for a spin, you’ll need to get electric car insurance.

The good news is that you’ll typically have your pick of several options when shopping for electric car insurance and an insurance agent can identify the best policy for you. National insurance companies all offer electric car insurance policies, and the process of getting insurance won’t seem much different in most cases.

Before your take your new ride out for a spin, don't forget to get electric car insurance. A man kneels and answers his cell phone while charging his blue EV at a charging station.
Before your take your new ride out for a spin, don’t forget to get electric car insurance. Connect with an insurance agent at AAA to learn more. Photo: Andrii/AdobeStock

The cost of electric car insurance is influenced by many individual factors, including the driving record and claims history of all the insured drivers on the policy, the types of coverages (liability, comprehensive and collision) and the policy’s deductible, and where you live. If you live in an area with high accident rates, you’ll tend to pay more for insurance. In these respects, electric car insurance is no different than conventional car insurance.

Insuring an electric car, however, is usually a bit more expensive than insuring a similar gas-powered vehicle. Here are a few reasons why.

Higher Sales Prices

As with all types of insurance, the more valuable a possession the more it costs to insure.

The biggest reason electric car insurance policies tend to cost more is the higher sales prices of these vehicles. Electric car insurance tends to be at least 10% to 15% more, according to recent consumer surveys, and this roughly aligns with the higher sticker price cost of the electric car compared to a similar model conventional car. 

Insurers are estimating the full replacement cost of the vehicle. So, because your electric car is going to cost more to replace, you tend to have to buy a larger policy. Even if you end up paying much less than sticker price because of government tax incentives, it’s the actual cash value that is used to determine how much insurance coverage is needed.

Of course, this applies to expensive gas-powered vehicles as well, be it a luxury sedan or a huge SUV, but when comparing similar vehicle types and trim lines, the electric vehicle is usually more expensive.

Closeup of car brake system.
Electric car maintenance and repair costs are expected to be lower than similar gas-powered models. Photo: pongmoji/AdobeStock


One of the appeals of electric cars is that that the owner’s anticipated maintenance and repair costs are expected to be lower than similar gas-powered models. Electric cars are simpler machines with far fewer parts and components under the hood. However, if an electric car is damaged in an accident, it can be more expensive to repair. For example, an electric car battery usually costs several thousand dollars to replace, often representing a third or more of the value of the car. If the battery is damaged to the point it needs to be replaced, the car could be deemed totaled by the insurance company.  

While electric cars are eventually expected to replace gas-powered vehicles, they still represent a small percentage of the marketplace (less than 5% of total vehicle sales in Washington state), so there isn’t yet an extensive network of electric car repair shops or parts suppliers. 

When a gas-powered vehicle is damaged, an independent repair shop that uses less-expensive aftermarket parts can do the work. When an electric car is damaged, the dealer may be the only option, and the owner might pay a premium for their specially trained technicians and proprietary OEM (original equipment manufacturer) parts.

Time is also a factor. It can be significantly longer to complete repairs on an electric car because of the limited number of qualified technicians and the extended time it takes to acquire parts. Because of this delay, electric car owners will need a rental car for a longer period, which is another cost consideration for insurance companies. If the car is drivable after an accident, you may be required to keep the car at home until it can be worked on in the shop. 

Because of this potential delay, many insurance companies don’t extend the rental past the limit listed on the policy, which is typically 30 days in the event of a vehicle repair. In such cases, the additional days of having the rental vehicle is an out-of-pocket expense for owners.

Insurance is just one factor to consider when shopping for an electric car.
Insurance is just one factor to consider when shopping for an electric car. Photo: The Supporter/AdobeStock


It may come as a surprise, but insufficient data is another factor in the higher cost of insuring an electric car. Insurance companies are constantly gathering and analyzing data, which their actuaries use to price the coverage. A large volume of high-quality data allows them to determine exactly how much risk is involved in covering any particular vehicle, in any particular city, driven by any particular type of driver. The more confident an insurance company is in the findings of its data, the less volatile their pricing can be.

Because electric cars are new and represent a small percentage of the marketplace, there isn’t as much data to model the insurance risk. This can lead to variations in premium costs. Insurance companies are trying to find the sweet spot between covering their risk and offering attractive insurance quotes.

As EVs become a larger part of the car market and sticker prices fall relative to similar conventional car, insurance premiums should decrease. Insurance companies even may specialize solely in electric car coverage.

Don't forget to get electric car insurance to protect your investment.
Electric cars are becoming increasingly popular in the Northwest, with more than 66,000 registered in Washington alone at the beginning of 2022. Photo: Ryan J. Lane/GettyImages

Insurance, of course, is just one factor to consider when shopping for an electric car. According to AAA research on the overall costs of owning an EV compared to a gas-powered vehicle, there are savings to be found on fuel costs, maintenance and more. As with almost any insurance-related issue, chatting with an insurance agent will provide you with invaluable insight when making your final decision.

—Written by Victor Whitman, last updated in December 2022.

—Top photo is by Stadtratte/GettyImages.

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