Is Car Insurance Cheaper for Electric Cars?

Ever since electric cars were first introduced into the world auto market, there have been mixed reviews on how these types of cars impact one’s monthly insurance costs. While some people claim that these cars are a nightmare to insure, the reality is that the insurance rate associated with a car is going to depend on more than just its source of fuel. Insurance costs on electric cars will vary between different insurance companies, but it is also important to realize that different electric cars are going to be associated with a different amount of risk to these companies. Let’s take a closer look at the risk profile of the electric car market as a whole.

Insurance Companies Only Care About Risk

electric car insurance

Are cars like this cheaper to insure? (IMG SRC – FLICKR)

Whether your car is fueled by gas or electricity, the auto insurance companies only care about the risk of serious damage taking place on the car. There are many different factors that go into the risks involved with a certain car. For example, insurance companies usually charge a higher premium on cars that have more horsepower than your average minivan. A car that has the potential to go fast has a higher risk of being involved in a serious accident because the driver will have the ability to drive at much faster speeds. The real issue when it comes to electric cars is that car insurance companies are not entirely sure of the risks involved with electric vehicles. These cars have not been on the market for very long in the grand scheme of things, so the companies do not have a lot of data to work with when it comes to how risky a certain type of automobile will be on the road. Most auto insurance companies are being rather conservative when it comes to insuring electric cars because they simply do not have an exact number on the risk factor involved with these vehicles.

Higher Repair Costs For Electric Vehicles

Another factor to consider when it comes to these cars not being on the market for very long is that they also cost more to repair. It is much harder for mechanics to find the spare parts that they need to repair electric cars because there is simply not enough of them on the market right now. Car specialists have been working on gas fueled vehicles for their entire lives, and working on electric vehicles is a completely different animal. This means that the labor involved with repairing an electric vehicle is going to see the same price increase as the parts involved with the repair job.

It Still Depends on the Individual Car

At the end of the day, insurance companies do not put all electric vehicles in the same basket. The real reason that insurance costs on some of them are going to be so expensive is that some of these vehicles are rather small and unstable. The difference in insurance costs between a car from ForTwo and one from Tesla is going to be rather massive. The Tesla Model S recently garnered the most positive safety rating of all time, so these cars are obviously going to come with lower insurance rates than a dinky two-seater from ForTwo.

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