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Do I Need Special Insurance for My Electric Car? – The Motley Fool

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by Kailey Hagen | Published on Nov. 3, 2022
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Electric cars are increasing in popularity, but they’re still not mainstream. It’s normal for drivers who purchase one for the first time to have questions about them, including how to insure them properly.
Below, we’ll take a closer look at what kind of insurance electric vehicles need, where to find it, and how to save money on it.
Insuring an electric vehicle is the same as insuring a conventional, gas-powered vehicle. All drivers must carry at least the minimum liability coverage required by their state’s laws. This pays for other people’s medical bills or property damage if the policyholder causes an accident.

If the driver has a lease or a loan on their vehicle, their lender will most likely require collision and comprehensive coverage as well. Collision coverage pays to repair the driver’s vehicle if they cause an accident or are involved in a single-car accident. Comprehensive coverage pays for damage caused by weather, animal-vehicle collisions, theft, and vandalism. Drivers can also add optional protections to their vehicles as they see fit.
Drivers can purchase car insurance for their electric vehicle with any auto insurance company. The process is the same for insuring a conventional vehicle. The driver shares information about their vehicle and driving record, gets a quote, adjusts their policy limits and coverage options, and purchases the policy. Then, if they need to file a claim, the insurance company pays for the damages once the driver has met their deductible.
The biggest difference between conventional car insurance and electric car insurance is the cost. Electric vehicles are generally more expensive to purchase and this makes them more expensive to repair. Since insurers may have to pay out more for a claim, they charge electric vehicle owners higher premiums.

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Shopping around remains the best way to score a great deal on car insurance, regardless of whether the vehicle is gas-powered or electric. Compare quotes from several providers to see which offers the best combination of high coverage, a low rate, and great customer service.
Though uncommon, there are a few companies, like Liberty Mutual and Travelers, that offer discounts to drivers with electric or hybrid vehicles. This could lower a driver’s rate considerably, but the only way to know for sure is to get quotes from insurers.
Electric vehicle owners who are willing to put their safe driving skills to the test could also try usage-based car insurance. This monitors driving behavior via a mobile app or a small device installed in the vehicle. Many companies that offer this give drivers an upfront discount for participating, and they can get additional discounts for driving safely and infrequently.
And if none of that’s enough, drivers can also lower their premiums by raising their deductibles. These are the out-of-pocket costs the policyholder pays when they file a claim. Those who are worried about not having enough cash on hand should take the extra money they’re saving on premiums each month and stash it in their emergency fund until they’ve saved enough to cover their deductible.
It might take a little time to find the right insurance coverage for an electric vehicle, but it will be worth it if an accident happens. And if the rate doesn’t fit easily into a driver’s budget, they can always shop around again in a year or two to see if they can find a lower premium then.

Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we've researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.
Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what’s almost a farm in northern Wisconsin with her husband and three dogs.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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