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Do electric vehicles cost more to insure than gasoline-powered cars? – Insurance Business

by Nov 6, 2022Blog0 comments

After soaring to a record-high $5 per gallon last June, gas prices have since begun to drop, falling by an average of $1.22 per gallon nationwide – a 24% decline. But the initial shock at how high fuel costs can go may have caused many American motorists to consider switching to an electric vehicle (EV), a recent survey by the auto club and insurance giant AAA has revealed.
Poll findings have shown that a quarter of respondents said that an EV would likely be their next car purchase, with 77% citing a “strong desire to save on fuel costs” as the top reason for doing so. Many consumers, however, are concerned about the rising cost of electric cars and their accessibility to charging stations.
“The increase in gas prices over the last six months has pushed consumers to consider going electric, especially for younger generations,” said Greg Brannon, AAA's automotive engineering and industry relations director, in a statement. “They are looking for ways to save, and automakers continue to incorporate cool styling and the latest cutting-edge technology into electric vehicles, which appeal to this group.”
Read more: Forget auto coverage – offer your clients ‘gas insurance’
Figures from the Argonne National Laboratory, a multidisciplinary science and engineering research center under the Department of Energy (DOE), however, suggest that US drivers are already making the switch.
The latest data from the group indicates that there were 77,687 plug-in vehicles – which include hybrid and battery-operated units – sold across the country last September, a more than 42% year-on-year spike.
Cumulatively, American motorists have purchased a total of 643,858 hybrid and electric cars in 2022 and over 2.99 million units since 2010.
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AAA’s poll reveals that one of the biggest barriers preventing motorists from switching to EVs is cost. Being a relatively new technology, there is often an assumption that electric cars are more expensive to maintain than their conventionally powered counterparts.
But while it is true that the upfront purchase price of a brand-new EV is often higher, drivers of this type of vehicle can achieve several financial benefits in the long run. These include:
Read more: What are the most affordable electric vehicles to insure?
Electric vehicles are often more expensive to insure than their gasoline-powered counterparts primarily because of higher repair and replacement costs for damaged parts. Electric car batteries, for instance, can set owners back between $5,000 and $15,000 if these need to be replaced. And because of the advanced technology used in such vehicles, fixing electric cars often entails a trained professional, which can push up premiums.
However, these are not the only factors that impact insurance costs for electric cars. Just like other types of vehicles, EV premiums can also be affected by the following:
To find out how much more electric car insurance policies cost compared to those for conventional fuel-powered vehicles, the consumer financial advisory website Forbes Advisor compiled data about the top-selling 2021 models from Quadrant Information Services. The website then compared rates based on a hypothetical female driver with a clean record getting the following coverage:
Here’s how much auto insurance rates vary between an electric and a gas-powered model, according to Forbes Advisor’s research.
Average annual car insurance cost (electric model)
Average annual car insurance cost (gas-powered model)
Chrysler Pacifica
Ford Fusion
Ford Escape
Honda Accord
Honda CR-V
Toyota Camry
Toyota Corolla
Toyota Highlander
Toyota RAV4
Subaru Crosstrek
Source: Quadrant Information Services / Forbes Advisor
Read more: Which are the cheapest cars to insure in 2022?
Although coverage for electric cars costs more, there are several practical measures that EV owners can take to slash insurance premiums. Here are some of them:

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