Few things are as frustrating about car ownership as insurance. You have to have it by law, but rates can vary because of so many seemingly arbitrary factors that it gets super-expensive in a hurry. If you move to a different state, those factors could change again. And we’re not even talking about how rates can vary wildly depending on the car.
2026 Dodge Charger Daytona Scat Pack Track Pack ExteriorChristopher Smith / CarBuzz / Valnet
That’s the crux of a recent report from Insurify, which highlights the average costs of insuring vehicles. There are certainly many different factors involved, but there’s unfortunate news for those who purchased or lease an EV in hopes of saving money on gas. The money you save just might skip your bank account and go right to your insurance provider.
According to Insurify, the average annual cost of insuring an EV is $3,159 – about 42% ($941 annually) higher than insuring a similar gas-powered car ($2,218). That’s just the average, as the cost varies, sometimes dramatically, from state to state, which we’ll get to. And there is some good news amid the sticker shock that will hopefully bring things down not just for EV drivers, but everyone. Let’s take a closer look.
States Matter When It Comes To Insurance
Car repair with hood openKate Ibragimova/Unsplash
The differences between the average cost to insure a regular gas vehicle versus an EV are variable depending on location. For example, the average annual cost of full coverage in Washington, DC, is $6,394 for EVs and $4,124 for gas-powered cars, whereas in states like Nebraska and Wisconsin, the difference between them is basically the cost of a couple of cups of coffee.
States with the biggest differences are Massachusetts, New York, Rhode Island, Oregon, and New Jersey. For those keen to hate California, the state is somewhere in the middle of the rankings with a 21% difference, alongside South Carolina, suggesting the insurance variables have little to do with a state’s political leanings. However, it can have something to do with the brand of EV. Mercedes-Benz, Tesla, and BMW models are the most expensive to insure.
Why Insurance For EVs Is So High
2019 Jaguar I-PACE. All-electric SUV. EV. Front end. RechargingJaguar USA
In reality, there are all kinds of factors involved, with some being clearer and easier to understand than others. We’re talking abstract things like climate risk and EV adoption levels to more concrete components like vehicle theft rates, population density, repair infrastructure, and of course, insurance regulations. To be fair, things like climate risk, vehicle theft rates, and population density affect all vehicle insurance rates, but EV adoption and repair infrastructure makes a big difference for electrics, specifically.
The cost of repairing a car has a big impact on insurance rates, and when you factor in things like having to replace the latest and greatest long-range battery, the cost of repair rises dramatically. But, it’s the increasing level of technology that brings us to the vaguely good news we alluded to earlier.
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According to Insurify, “broad industry adoption of assistive technology across newer vehicles is narrowing the insurance cost gap.” That assistive technology includes things like automatic emergency braking, blind spot monitoring and lane assist, and so on. Newer cars tend to have more built in as standard to lower trims, and the cheapest way to repair a vehicle is to avoid the crash in the first place.
CarBuzz Insight – Why This Matters:
Gas PricesCarBuzz with AI
The current cost of ownership of a car is particularly high, and an all-electric vehicle is the obvious answer to the relentless rise in gas prices in the US. The reason all-electric vehicles exist is to avoid using gas after all, and that point is being driven home right now. The lack of an engine also means no need for oil changes, coolant changes, and obviously you don’t need components associated with combustion engines. This will reduce maintenance costs, further reducing cost-of-ownership.
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However, this is all offset by the tech used to make EVs work, and that tech is still relatively new in the 100-plus year history of the automobile. That’s reflected in insurance prices, and it’s a reminder that all-electric vehicles are still not quite out of the early adoption stage in many states. As they move further into the mainstream, hopefully insurance and other operating costs will fall.
Source: Insurify
