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Understanding Electric Car Insurance Costs

Is Electric Car Insurance More Expensive?

Electric vehicles (EVs) have become increasingly popular, with sales rising by 35% in 2023 according to the International Energy Agency (IEA). Despite their growing affordability, EVs generally cost more to insure than gas-powered cars. The National Association of Insurance Commissioners (NAIC) reports that insuring an EV costs $44 more per month on average compared to a gas-powered vehicle.

Why Does Electric Car Insurance Cost More?

Several factors contribute to the higher cost of insuring electric cars:

• Higher Price: The average new EV sold for $55,353 in January 2024, compared to $47,401 for the average new car across all categories.
• Repair Costs: EVs may require less maintenance, but significant repairs, especially battery replacements, can be costly.
• Shortage in Repair Resources: The demand for EV parts and qualified labor is increasing, but availability is still catching up.

Benefits of Electric Cars

Despite higher insurance costs, electric cars offer several benefits:

• Less Emissions: EVs emit fewer tailpipe emissions, reducing environmental impact.
• Fuel Savings: Operating an EV can be cheaper than using gas due to higher energy efficiency.
• Lower Maintenance Costs: Electric motors are less complex, eliminating the need for regular oil changes and other routine maintenance.
• Tax Credits: You may be eligible for federal and state tax incentives for purchasing an EV.
• Access to Reserved Lanes and Parking: Many cities offer benefits like HOV lane access and reserved parking for EVs.

How to Save on Electric Car Insurance

Here are some tips to help you save on electric car insurance:

Shop and Compare Insurers

Get at least three price quotes from different auto insurers to find the best rate. Make sure to compare similar coverage options and amounts.

Take Advantage of Discounts

Many insurance companies offer discounts for EV drivers. Check with your insurer to see if you qualify for any green discounts or other savings opportunities.

Raise Your Deductible

Increasing your deductible can lower your premiums, but ensure it’s an amount you can afford to pay out of pocket if needed.

Consider Reducing Coverage

If your car is paid off and you can afford repairs or replacement out of pocket, consider dropping collision and comprehensive coverage to save money.

Keep a Clean Driving Record

Maintaining a driving record free of accidents and traffic tickets can help lower your insurance premiums.

Frequently Asked Questions

Do All Companies Offer Electric Car Insurance?

Not all insurance companies offer specific policies for electric cars, so it’s important to shop around.

Do Insurance Companies Offer Discounts for Electric Cars?

Yes, many insurers offer discounts for driving an electric or hybrid vehicle.

Are Electric Cars More Expensive?

While the initial cost of an EV can be higher, the long-term savings on fuel and maintenance can offset the higher purchase price.

The Bottom Line

Electric cars offer numerous benefits, but lower insurance premiums are not typically one of them. However, you can still find ways to save on your insurance costs. For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. We are here to help you with all your mortgage needs!

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