How Much More Do Electric Vehicle Owners Pay for Insurance?

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.

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.

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.

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.

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.

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

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.

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.