How Much More Do Electric Vehicle Owners Pay for Insurance?


Banner image
ByErin C. Perkins
Edited byMegan Hull
ByErin C. Perkins
Edited byMegan Hull

Updated: May 20, 2024

Advertising & Editorial Disclosure

With interest and demand for electric vehicles on the rise, MoneyGeek looked at insurance premiums — along with their combustion equivalents, when applicable — to find out how much more electric vehicle owners pay for auto insurance. Of the electric vehicles MoneyGeek used in its study, annual insurance premiums ranged from $1,400 to slightly under $3,400. Here's what MoneyGeek's analysis of car insurance premiums for 14 current models of electric cars found.

KEY FINDINGS
  • Insuring electric vehicles now costs roughly the same as conventional gas-powered cars, with annual premiums for each averaging $1,607 and $1,606, respectively. This is a significant change from just two years ago when EVs were 15% more expensive to insure.

  • Of the electric vehicle models that had corresponding combustion models, MoneyGeek found that most electric vehicles had higher insurance premium costs, ranging from 3% to 12% more expensive than their combustion counterparts. The only exception was the Ford Mustang Mach E, which is 18% cheaper to insure than its combustion counterpart, the Ford Mustang.

  • Teslas are amongst the most costly electric vehicles to insure. MoneyGeek's analysis found that four of the five electric cars with the highest insurance costs were Teslas.

  • Six of the 14 EV models’ insurance rates were higher than the national average premium of $1,739 annually.

Which Electric Vehicles Are the Most Expensive to Insure?

Topping the list as the most expensive electric vehicle to insure is the 2022 Tesla Model S at $3,365 yearly. That’s almost double the $1,739 average annual cost of car insurance. The 2022 Porsche Taycan ranks second at $3,093, while the next three highest rates belong to 2022 Tesla models: the Tesla Model X ($2,915), Tesla Model Y ($2,189) and Tesla Model 3 ($2,086).

At the lower end of insurance costs for electric vehicles is the 2022 MINI Electric. The typical yearly insurance premium for this vehicle is $1,389, which is 20% lower than the national average cost of insurance. However, these rates still don’t beat the gas-powered Honda CR-V, which costs $1,334 annually to insure. The Subaru Forester — another combustion-powered vehicle — has even lower premiums at $1,291 yearly.

Most Expensive Electric Vehicles to Insure
Vehicle
Model Year
Annual Premium

1.

Tesla Model S

2022

$3,365

2.

Porsche Taycan

2022

$3,093

3.

Tesla Model X

2022

$2,915

4.

Tesla Model Y

2022

$2,189

5.

Tesla Model 3

2022

$2,086

6.

Audi E Tron

2022

$1,983

7.

BMW I3

2021

$1,730

8.

Hyundai Ioniq

2022

$1,699

9.

VW ID.4

2022

$1,631

10.

Chevy Bolt

2022

$1,571

Teslas Cost More to Insure Than the Majority of Electric Vehicles

Teslas are amongst the most expensive electric vehicles to insure. MoneyGeek’s review of 14 EV models found that four of the five electric cars with the highest insurance costs were the Teslas — specifically, the Tesla Model Y, Tesla Model X, Tesla Model S and Tesla Model 3.

Generally, the more your car costs, the more expensive it is to insure — this is part of why Tesla premiums are higher than average. Another reason insurance is so costly for Teslas is that repair and maintenance costs tend to be much higher than most vehicles. For example, a 2015 Insurance Institute for Highway Safety (IIHS) study found that the Tesla Model S had higher claim frequencies, severities and overall losses than comparable large luxury cars. The higher claim severity was thought to be attributed to the car’s battery replacement cost — a whopping $16,000. Kelley Blue Book reports that a battery replacement for the average vehicle runs between $45 to $250.

Insurance costs for Teslas are significantly higher than most other vehicles in their combustion categories. View the graph below to see how the insurance costs of each Tesla model compare to other cars in the same category.

Bar graph comparing the costs of Tesla models to similar vehicles

Comparable Make Model Analysis

The insurance gap between electric and gas-powered vehicles has narrowed in 2023, with both types of cars now averaging similar annual premiums of approximately $1,600. This marks a significant change from two years ago when electric vehicles faced notably higher insurance costs than their combustion counterparts.

However, MoneyGeek found that the four electric cars with combustion equivalents included in our study still have slightly higher insurance premiums; that's with the exception of the Ford Mustang Mach E, which is 18% cheaper to insure than its combustion counterpart, the Ford Mustang.

Electric Vehicle Insurance Cost Compared to Combustion Counterparts
Electric Vehicle
Combustion Vehicle
Electric Insurance Premium Increase

Audi E Tron

Audi Q5

11.7%

Kia Soul EV

Kia Soul

7.9%

MINI Electric

MINI Cooper

2.9%

Ford Mustang Mach E

Ford Mustang

-18.4%

Which Insurers Offer the Best Rates for Electric Vehicles?

Although insurance rates for EVs are often higher, many providers still offer competitive car insurance rates.

MoneyGeek's review of 14 electric vehicle models showed that State Farm offers the lowest rates across the board, with an average annual premium of $1,481. The next most affordable provider is GEICO ($1,501), followed by Nationwide ($1,671).

To find the cheapest car insurance, compare rates from several providers. Rates can vary by location and other factors, like your unique driving record. Also, keep in mind that different insurers charge different rates for specific car models.

Insurance discounts can lower the cost of your annual premium. While the savings offered by each insurer can vary, most companies have bundling, safe driving and good student discounts that make coverage more affordable for many drivers. MoneyGeek recommends finding all available provider discounts and comparing quotes with other insurance companies to find the best rate.

Average Electric Vehicle Insurance Costs by Company
Provider
Average Premium

1.

State Farm

$1,481

2.

GEICO

$1,501

3.

Nationwide

$1,671

4.

Travelers

$1,721

5.

Progressive

$2,114

6.

Allstate

$2,521

7.

Farmers

$2,531

Drawing of a man holding a big electric coin and standing next to a piggy bank.

Can Electric Vehicles Help You Save In Other Ways?

While insurance costs may be more expensive, owning an EV may save you money in some ways that conventional cars can’t.

    gasCard icon

    Lower fuel costs

    In many cases, it's cheaper to charge an EV than to fill a standard vehicle. However, electric utility costs are different from state to state. Battery capacity and battery size also vary, as can gasoline prices by state and miles-per-gallon (mpg) of gas-powered automobiles — these factors can all affect how affordable it is to run an electric vehicle compared to a combustion car.

    coins2 icon

    Lower maintenance costs

    Because EVs operate on a single component — the electric motor — they don’t have as many mechanical parts as gas-powered cars. That means less periodic maintenance services are required. Maintenance for EVs is estimated to cost $330 less than gas-powered vehicles on average annually.

    rewards icon

    Eligibility for government stimulus packages

    There are many incentives for EV drivers on the state and federal levels. Some of the perks can include:

    • A federal tax credit for plug-in electric vehicles (PEV) with certain terms
    • Tax credits and purchase rebates
    • Emission testing exemptions
    • Reduced utility charges or rebates for charging EVs
    • High-Occupancy Vehicle (HOV) lane access
    • Legislative support for EV purchases or mandated fleet requirements
    • Reduced licensing, registration or road use fees — although other states charge EVs additional fees
    forest icon

    Reduced carbon footprint

    Emissions from the life cycles of EV batteries are typically less than an internal combustion engine vehicle. However, it’s important to also consider the way the electricity used to power an EV was generated, as these sources of electricity can also cause emissions. Fortunately, emissions from electricity generation are decreasing in some areas. They’ve fallen 38% since 1990 in the UK, according to an analysis by Carbon Brief. This decline has been largely attributed to a cleaner electricity mix based on gas and renewables instead of coal.

There are many factors to consider when weighing the benefits of an electric vehicle. Some EVs' high insurance costs and purchase prices may be unappealing to some drivers. However, different factors may be more important to others — like potential savings that can come with long-term ownership, such as fewer trips to the mechanic, reduced gas costs, government incentives and a lower carbon footprint.

Methodology

For this analysis, MoneyGeek collected data from Quadrant Information Services, Kelley Blue Book and Edmunds.com. We analyzed insurance premiums for various make, model and vehicle year combinations from national insurance providers in locations across the country.

The average driver profile is based on the following persona:

  • 40-year-old male
  • Clean driving record
  • Comprehensive and collision coverage of 100/300/100 with a $1,000 deductible
  • 12,000 miles driven annually

The comprehensive and collision selection provides coverage of $100,000 bodily injury liability per person, $300,000 bodily injury liability per accident and $100,000 property damage liability. When analyzing insurance premiums and fair purchase prices for electric vehicles versus combustion engine vehicles, we primarily used 2022 car models. However, for our Kia brand comparison, we relied on 2019 models for the Kia Soul and Kia Soul EV due to limited data availability. We also utilized 2021 car models for the Mini Electric and Mini Cooper comparison of fair purchase prices.

About Erin C. Perkins


Erin C. Perkins headshot

As a longtime writer and editor with a master's degree in journalism, Erin has written about a variety of topics over the years including lifestyle, business, entertainment and government, but she has spent the last few years focused on various money topics like banking, insurance and budgeting for AAA Living Magazine, Wells Fargo and BB&T. She loves creating content that inspires financial empowerment.


sources