You can save a shocking amount of green when you go green. Yes, you might pay more up front, but tax credits, lowered or zero fuel costs, and reduced maintenance can make a hybrid or electric vehicle a smart investment. But will insuring your hybrid or electric car insurance be smart money spent or simply a drain on your wallet?
Hybrids vs. Electric Cars
What’s the difference between hybrids and electric cars? Check out these three types of green vehicles:
Hybrid electric vehicles have both an electric motor and a gas engine. The presence of two motors gives it the name “hybrid.” Hybrids take advantage of the three times improved efficiency that electric motors have over gas motors.
Gas engines are cheaper and can fuel the vehicle faster. Combining the two gives the driver a “win-win” scenario where the car runs on electricity when it’s most efficient (city driving) and gas when it’s most efficient (highway driving).
Plug-in hybrid electric vehicles (PHEVs) employ both electric batteries and motors as well as gas engines. You can charge these vehicles at home with your wall outlet. PHEVs usually run on their electric-only motors for relatively short distances (10 to 50 miles) and then work as a standard hybrid for longer distances.
All-electric vehicles drop the gas engine altogether and rely solely on the electric battery and motor for power. You can charge them with a wall outlet or at a station just like PHEVs. Drivers have the choice to use a 110-volt wall outlet or upgrade to a faster 240-volt charger.
How much does insurance for hybrids and EVs cost?
Hybrid and EV auto insurance cost more for two main reasons:
- Hybrids and EVs are simply more expensive. Compare vehicles that come in both gas and green versions, and you’ll see that the hybrid costs about 15–33 percent more and the electric version costs about 50–100 percent more. For example, a 2020 Toyota Camry’s MSRP is $24,425, and a hybrid is $28,430; a 2019 Kia Soul’s MSRP is $16,490, and an electric is $33,950. Higher cost means more expensive to insure.
- Hybrids and EVS are more costly to repair. After an accident, hybrid and electric vehicles need specialized parts and technicians. For instance, a fender bender that damages the battery pack will cost thousands.
Just keep in mind the added insurance expense is offset by tax credits, reduced fuel cost, and lower maintenance cost.
Sample Car Models by Average Total Insurance Premium Cost
Yes, the hybrid and electric vehicles cost more to insure based on our data, but even from a glance, you can guess the cost is in the ballpark as that for regular vehicles. Check out the average total car insurance premiums for common electric, hybrid and non-electric vehicles below, averaged from the proprietary Insurify database of millions of customer quotes.
|Honda Insight (Hybrid)||$1,906.78|
|Toyota Prius (Hybrid)||$1,694.05|
|Tesla Model 3 (Electric)||$3,631.93|
|Nissan Leaf (Electric)||$2,133.87|
|Honda Civic (Non-electric)||$1,641.94|
|Toyota Camry (Non-electric)||$1,623.38|
Are electric cars more expensive to insure than hybrids?
Yes, electric vehicles are typically more expensive than hybrids and therefore cost more to insure. Electric cars are costlier than hybrids, which are costlier than conventional cars to insure. The logic applies across the board for insurance. The pricier something is, the greater the risk (expense to replace), and therefore, the higher price to insure.
Do insurers provide coverage for electric cars?
Yes, insurers design their products to protect drivers of all vehicles, including EVs and hybrids. The coverages that apply will be the standard bodily injury and property damage liability coverage, comprehensive coverage, collision coverage, and other added coverages, such as uninsured motorist coverage, underinsured coverage, medical payment, and rental reimbursement. The coverages are the same, but you might be pleasantly surprised to know that electrics and hybrids may qualify for “green discounts,” which could reduce your monthly bill by 5 or 10 percent.
How to get an electric car insurance quote
Use a quote-comparison tool like Insurify to compare all the top companies for your electric or hybrid vehicle. This way, you find the coverage you deserve for your green vehicle at a price you can afford, all in as little as two minutes.
Do I need a special policy for my electric car?
No, insuring your electric car or hybrid is just like insuring a gas vehicle. You can expect all the same coverages you’d normally buy. Even if you choose something like Tesla insurance, the underlying policy will be standard car insurance.
In August 2019, Tesla launched its own insurance. The company only sells policies to California drivers but plans to expand to the rest of the U.S. soon. Tesla Insurance offers the standard bodily injury and property damage liability, collision coverage, comprehensive coverage, and added coverages that you expect on any car insurance policy. There’s even an Autonomous Vehicle Protection Package.
Tesla gives discounts for multiple vehicles, but you lose the chance to bundle your homeowners policy. The company boasts of insurance rates 20 to 30 percent lower than its competitors, but car buyers have reported mixed results. Tesla owners living in California can get quotes and a policy from the Tesla website. New owners in the state can get a quote once their VIN appears in their Tesla account.
Tips to Save on Electric or Hybrid Car Insurance
Take a look at these nine ways to cut the cost of your electric or hybrid car insurance:
1. Calculate your claims. Before filing a comprehensive claim, get an estimate from a repair shop, ask your insurer how a claim would change your rate, and pick the cheaper of the two costs.
2. Check rates before you buy a car. Test-drive the price before the vehicle.
3. Get multiple quotes. You could call around or check various sites, but the quickest and most thorough method to save on premiums is to use a quote-comparison tool like Insurify to do the hard work for you.
4. Improve your credit. If you plan to finance or lease a hybrid or EV, you probably already have good credit. But if your credit is less than perfect, paying off debt might save you hundreds on car insurance.
5. Qualify for discounts. Here are a dozen common price breaks.
- Driving history discounts:
- Defensive driving discount
- Driver training discount
- Good/safe driver discount
- Group/membership discounts:
- Good student discount
- Mature driver discount
- Military discount
- Vehicle-based discounts:
- Green driving discount
- Multi-vehicle discount
- Safety features discount
- Policy discounts:
- Customer loyalty discount
- Early signing discount
- Multi-policy discount
- Policy discounts:
6. Quote both regional and national insurance providers. Go beyond the ones with memorable slogans (like GEICO) because the smaller companies may have competitive rates.
7. Raise your deductible. If you can afford the out-of-pocket cost, a higher deductible will automatically lower the price you pay.
8. Stack tax credits. Depending on your area, local, state, and federal tax credits can knock your car’s price down into an affordable range. Please note that GM and Tesla no longer qualify for the $7,500 federal tax credit, and tax credits only apply to new (not used) vehicles.
9. Try telematics, usage-based, or pay-per-mile insurance. Has the COVID-19 crisis changed the way you drive? Telematics will give you discounts for safe driving, and usage-based or pay-per-mile will save you money if you commute far less than in the past.
Is it worth it to buy an electric car?
According to Consumer Reports, your electric car will save you between $6,000 and $10,000 throughout its lifetime. That may be reason enough for some people to pull the trigger. But remember that EVs tend to have higher price tags than gas cars and that you may have to shell out an added amount close to the long-term savings up front.
Here are some of the pros and cons of buying an electric car:
|Cheaper energy costs (gas-free)||Expensive battery replacement|
|Better for environment (emissions-free)||Few charging stations|
|Quieter performance||Higher insurance costs|
|Reduced maintenance expense||Long charging time|
|Special highway commuting lanes (depending on location)||Shorter driving range (single charge)|
|Tax credits/rebates||High up-front price|
Electric Car Insurance: FAQ
What is Tesla Insurance?
Tesla Insurance is standard car insurance offered by the company for its vehicles in California, with plans to expand to other parts of the U.S. The company boasts of rates that are 20 to 30 percent less than their competitors. Tesla grants the insurance coverages you’d expect from any other company, such as bodily injury and property damage liability coverage, collision coverage, and comprehensive coverage.
Why is electric car insurance so expensive?
Electric cars' price tags, parts, and repair costs are far more expensive than gas cars. Because repairing or replacing cost more, car insurance companies offset the risk by charging higher premiums. There's also far less data for insurance informational purposes on these vehicles. As the cars become more common and affordable, insurance industry prices will also go down.
How much is insurance for an electric car?
Insurance for electric cars is about 20 to 35 percent more than gas cars. To find the best price for your electric vehicle, check a quote-comparison tool like Insurify, and you’ll get coverage you deserve at a price you can afford in as little as two minutes.
Conclusion: How to get the best and cheapest car insurance
Shocker—states like California declare that all new passenger vehicles will be electric by 2035. It’s safe to say electric cars will mark the road to the future. They offer quieter rides, gas-free driving, and a carbon footprint that’s better than hugging a tree.
Yes, the up-front price tag might zap your pocketbook right back to reality. But after factoring in tax credits, a lower long-term cost, and the incredible number of miles these vehicles can drive on original parts, many drivers are amped to skip the gas guzzler and invest in a green car.