Electric car insurance: why EVs can cost more, what claims data show and how the battery is covered

Is car insurance more expensive for an electric car?

Often, but the model matters more than the fuel. An EV is insured with the same coverages as any other car, and your state's liability minimums apply as usual. What changes is how the insurer rates the vehicle.

Insurers group cars by make, model and model year according to their claims experience, as our guide to how your vehicle affects your premium explains. EV features push that rating in both directions.

The NAIC's consumer guide says the type of vehicle you drive affects your price, particularly for comprehensive and collision, which is where an EV's value and repair costs show up.

What insurance claims data show about electric cars

The best public comparison comes from the Highway Loss Data Institute (HLDI), the insurance-data arm of IIHS. Its Bulletin Vol. 37 No. 25 compared 9 electric models with gas versions built on the same platform and sold under the same name, from model years 2012-2020. Comparing closely matched models makes the results easier to read, although the EVs still cost more to buy, as noted below.

Frequency is how often claims were filed (adjusted for mileage), severity is the average cost of a claim, and overall losses combine the two. Comprehensive coverage was not studied.

In plain terms, the EVs had fewer claims and a collision claim cost about the same. Property damage liability claims cost slightly more on average.

Fewer miles explain only part of it

The EVs were driven 39% fewer miles per day than their gas twins. Less driving means less exposure to crashes, which is why your yearly mileage is a rating factor. HLDI adjusted for mileage and the EVs still came out ahead, so driving less was only part of the reason.

The limits of the data

• The study only covered EVs that share a platform and name with a gas model. It left out EVs with no gas counterpart, such as Tesla models, the Chevrolet Bolt and the Nissan Leaf.
• The EVs' base price was 62% higher, so physical damage coverage can still cost more in dollars.
• Results change over time. An earlier HLDI bulletin, from April 2016, covering 7 electric models from model years 2011-2015, found the EVs' collision claims cost 25.9% more on average than their gas twins' claims.

Repair costs: sensors, calibration and weight

Sensors and calibration

Many newer vehicles, including EVs, have front crash prevention, blind spot monitoring and cameras, with sensors in bumpers, mirrors and behind the windshield. About half of the owners IIHS surveyed who had these systems repaired reported problems with the features afterward. About two-thirds said the repair included calibration, which can require a large space, specialized training and expensive equipment.

The windshield shows how this adds up. A simple replacement can cost as little as $250, but vehicles with front crash prevention were much more likely to have glass claims of $1,000 or more, largely because of calibration. See our guide to windshield and glass claims.

The same technology also prevents crashes. In an HLDI comparison of otherwise identical models from 2017-2022, vehicles with a bundle of driver assistance features had collision claims that cost about 10% more. But they had about 10% fewer collision claims, and overall collision losses about 5% lower.

Weight

The first all-electric vehicle IIHS crash tested weighed 3,339 pounds; many current EVs exceed 6,000 pounds. A heavy vehicle tends to protect its own occupants, but in a collision it pushes a lighter vehicle backward, raising the forces on the people inside. That matters most for liability, which pays for the harm you cause others.

Specialized repairs

NHTSA advises that EVs be serviced by technicians with high-voltage training and the right protective and diagnostic equipment. If few qualified shops are near you, a repair may take longer, so check whether your policy includes rental reimbursement.

Is the battery covered by car insurance?

Yes, when it is damaged by something your policy covers. Battery damage is handled like damage to any other part of the car. Wear and manufacturing defects are not insurance matters.

Home chargers and charging cables

A Level 2 home charger runs on 240 volts and usually needs a circuit added by an electrician. The Department of Energy's Alternative Fuels Data Center notes that permits may be required and installations must meet local and state codes. A wired-in charger is likely to be treated as part of the house, which a standard homeowners policy covers along with attached structures. Policies differ, so ask your home insurer and keep the permit and invoice.

Portable cords are trickier. The NAIC says most auto policies don't cover equipment that is not permanently installed. The Insurance Information Institute's sample homeowners form excludes motor vehicle equipment, but only while it is in or on the vehicle. So a cord stolen from your trunk may fall into a gap, while one stolen from your garage may be covered as personal property, subject to your deductible.

Total loss and battery damage

When repairs would cost too much compared with the car's value, the insurer declares a total loss and pays the car's actual cash value, minus your deductible. EVs can reach that point sooner than you might expect:

• The battery pack is expensive. The Alternative Fuels Data Center says manufacturers typically don't publish replacement battery prices, and that replacing one outside the warranty is expected to be a significant expense.
• Damage can be hard to judge. NHTSA warns never to service the traction battery without proper training and specialized equipment, so the pack may need a specialist inspection.
• Damage can lead to a fire later. NHTSA and the Alternative Fuels Data Center both warn that a damaged battery can ignite after a delay.

Some states set the point by law. Iowa treats a vehicle as salvage when repairs exceed 70% of fair market value, and South Carolina treats a car as a total loss at 75% of actual cash value.

Example: an EV has an actual cash value of $30,000. A crash damages the underbody and battery pack, and the estimate is $24,000, most of it for the pack. That is 80% of the car's value, above both thresholds: in South Carolina it would count as a total loss, and in Iowa it would be treated as salvage. These figures are hypothetical.

Owing more than the car is worth

The Insurance Information Institute says most cars lose about 20% of their value in the first year, and a total loss payout is based on that value, not your loan balance. If you financed or leased an EV with a small down payment, gap insurance pays the difference.

What to do after your electric car is damaged

1. Get everyone clear, and call 911 if there is a fire. NHTSA says to assume the battery is energized and fully charged, and that damage can release toxic or flammable gases and cause a fire, right away or later.
2. Don't touch exposed parts. Exposed wires and high-voltage components can cause shocks.
3. Tell the tow operator the car is electric. NHTSA says EVs and hybrids can be damaged if towed on their drive axle; your owner's manual lists the right method.
4. Keep the car outside. Don't park a damaged EV in a garage or within 50 feet of a house, other structure, vehicle or combustibles. Ask the tow yard and shop to do the same.
5. Contact your dealer and your insurer. NHTSA advises contacting the dealer immediately. When you report the claim, say the battery may be damaged.
6. After a flood, have the car checked before using it. NHTSA says EV and hybrid batteries are highly corrosive and shouldn't sit in standing water; if you suspect battery damage, contact your dealer or emergency services. Flood damage is a comprehensive claim.
7. Choose a qualified shop. Ask whether its technicians have EV high-voltage training and whether the estimate covers a battery inspection and sensor calibration.
8. Review the estimate or total loss offer. Check whether the pack will be repaired or replaced, and compare any total loss offer with similar EVs for sale.

Discounts and other ways to lower EV insurance costs

Discounts are set by each insurer and vary by state, so treat these as questions to ask:

• Alternative fuel discounts. The Insurance Information Institute says some insurers offer discounts for cars that use an alternative energy source, including electricity.
• Low mileage. Give your insurer an accurate yearly mileage; Triple-I also describes pay-as-you-drive policies that discount drivers who log fewer miles than average.
• Usage-based programs. Telematics programs price part of your policy on how and how much you drive.
• Safety and anti-theft equipment. The NAIC suggests asking about discounts for protection devices such as airbags, anti-lock brakes and anti-theft devices.
• Bundling. The NAIC also lists insuring your home and car, or several cars, with one company.
• Your deductible. A higher deductible lowers the premium, but pick one you could afford after a battery or glass claim.