The electric car (EV) is not a new innovation; there have been variations on the EV for almost 100 years. They were actually replaced by the gas-powered engine in the early part of the 20th century and were ignored for almost 100 years. The Middle East unrest and OPEC have revived consumer’s interest in the EV.
Car insurance companies have not had a lot of experience in writing policies for EVs, which includes assimilating crash statistics for EVs. The underwriting has not been done on reliability or performance on the EV. The lack of these statistics may cause car insurance rates for the EV to be higher.
Those are not the only things that may cause the rates for EVs to be higher than traditional vehicles.
There are so few EVs available to the public that getting replacement parts for the EV is expensive. Replacement parts on the EV will need to come directly from the manufacturer.
Often times when there is a crash in a traditional vehicle, the insurance company and the repair shop will work to locate either used or remanufactured parts, or undamaged parts from a wrecked vehicle. These parts will be either certified or approved for repair and help to keep the cost of replacement parts down. A door for a champagne colored Toyota Camry is easier to find than the bumper to a Nissan Leaf.
The cost of mechanical repair on the EVs is higher. The EV does not have the usual engine components, so each piece needs to be specially ordered.
Parts are not the only major expense for insurance companies when it comes to EVs. These vehicles are significantly more expensive than the average new car price of $28,000. The Chevrolet Volt has a price tag over $40,000 and the Nissan Leaf is only $8,000 less. These types of prices put the cost to insure these cars in a much higher bracket.
Comparing it to the least expensive Mercedes-Benz C-Class, which starts at $34,000, the Nissan Leaf is right there in cost.
The latest round of EVs has not been on the market long enough for reliability data to be collected. This means a higher insurance premium since the insurance company has no way of knowing if the car that they are underwriting is going to last ten years or two months.
The insurance company will base your insurance rates on all the normal criteria, which includes age, credit score, mileage and driving history along with the EV’s history. You will want to talk to several insurance companies to get a good overall auto insurance quote comparison. One company may score the EV more of a risk than another may so by calling a couple companies and comparing auto insurance quotes, you will have better idea of what your premium should cost.
If you do not like the premium costs for the EV, then you may be better served with purchasing a hybrid, which has a longer insurance history than the EV. Either way, you are doing your part to help the environment.