Electric Shock: EVs Cost 23% More to Insure Than Gas-Powered Vehicles

Electric vehicle owners may spend less on fuel for their vehicles, but they pay more for car insurance — a lot more.

Full-coverage car insurance for EVs averages $3,430 annually compared to $2,778 for gas-powered internal combustion engine (ICE) vehicles, according to a new report by Insurify. Higher sale prices and higher repair costs for EVs contribute to the elevated cost of insuring these vehicles, Insurify data analysts said.

Comparing EV costs to ICE vehicle costs

Electric vehicles can cost significantly less to power than an ICE car. Drivers who charge their EVs only at home could spend as little as $812 per year on electricity for their vehicles, according to Kelley Blue Book (KBB) calculations. By comparison, the average annual cost of gas is around $2,449, J.D. Power estimated based on Bureau of Labor Statistics data.

But other expenses, including the initial cost to purchase an EV, higher repair costs, and much higher insurance premiums can offset the fuel savings.

The average MSRP for EVs is $55,105 — 13% more than the average for ICEs, at $48,724, according to KBB. Auto insurers also charge more for higher-value vehicles since they typically cost more to repair or replace.

The average cost to repair an EV after an accident is $6,066, about 29% higher than the $4,703 average post-accident repair for ICEs, KBB reported.

All these factors contribute to EVs’ higher insurance rates. In 2024, it cost 23% more to insure an EV than an ICE vehicle, Insurify data shows. And the cost of EV car insurance rose 28% between 2022 and 2023, while car insurance for ICE vehicles increased by only 13% during the same time period.

EVs with the highest insurance costs

When stacked up to average insurance premiums for comparable ICE vehicles, some EV models fare worse than others.

For example, the Tesla Model 3 was the most expensive EV to insure out of the nine EV models that Insurify data scientists analyzed. The Model 3’s average annual full-coverage insurance premium was $4,362 in 2024. That’s 25% more than the cost to insure a comparable gas-powered Mercedes Benz A-Class.

EV Model	Average Annual Cost of EV Full Coverage (2024)	Comparable ICE Model	Average Annual Cost of ICE Full Coverage (2024)	EV Cost Difference Compared to ICE Models
Tesla Model 3	$4,362	Mercedes Benz A-Class	$3,486	25%
Tesla Model X	$3,958	Audi Q3	$2,828	40%
Tesla Model Y	$3,939	Audi Q5	$2,874	37%
Hyundai Ioniq 5	$3,621	Hyundai Kona	$2,572	41%
Tesla Model S	$3,535	Audi A7	$3,612	-2%
Kia EV6	$3,132	Kia Sportage	$2,372	32%
Volkswagen ID.4	$2,937	Volkswagen Tiguan	$2,540	16%
Chevrolet Bolt EUV	$2,792	Chevrolet Trax	$2,306	21%
F-150 Lightning	$2,591	Ford F-150	$2,408	8%

Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.

What’s next for the U.S. EV market

More Americans bought electric vehicles in 2024, with sales surging by 11% in the third quarter of the year, according to Kelley Blue Book. But if the new administration repeals a $7,500 Biden administration tax credit for EVs, sales could plunge, according to the National Bureau of Economic Research (NBER).

In 2023, the first full year the EV tax credit was available, sales of electric vehicles soared by 46%, Cox Automotive reported. But EV sales could drop by 8% to 27% if the tax credit goes away, NBER researchers predicted.

A decline in the number of EVs purchased won’t necessarily lead to a drop in insurance costs, said Chase Gardner, data insights manager for Insurify.

“The cost of parts and labor for repairs for all vehicles has been rising since the pandemic,” Gardner said. “If EV sales fall drastically, it’s possible ‘green parts’ — secondhand original equipment parts — could become less readily available. Insurers and repair shops would have to spend more for new OE parts, and they’ll pass that cost on to consumers.”

Insurify’s car insurance data is available for download from its Auto Insurance Data Center. Members of the media looking for additional data or insights should email [email protected].

Related articles