Everyone should have insurance on their automobile, even if it is just the basic liability coverage that will pay for damages to property owned by someone else. Fortunately, owners usually maintain insurance on millions of gasoline-powered cars that are driven millions of miles every year.
Through the decades, insurance companies have refined their insurance policies to make them specific to the cars produced by major manufacturers around the world. Premiums and rates of pay have long been established for repair and replacement of vehicles powered by gasoline and diesel fuel.
Electric Car – Covered?
In simple terms, buying insurance for your electric car will be a bit different than buying similar insurance for a gasoline-powered vehicle. Some of the details are the same, of course. You may be required to carry liability coverage so that the company can establish limits on what it will pay if you damage other property or if the accident is your fault. If your electric car is new and you are making payments on it you will have to have a “full-coverage” policy that will repair or replace your vehicle.
However, insurance for electric cars can be both good news and bad news.
First, the good news – insurance companies sometimes offer discounts on your premiums if you are buying a policy for an electric car. In fact, some insurance companies view electric cars and their owners as “good risks” because the cars are safer for the environment, may be driven at slower speeds or for shorter distances, and because the owners tend to be more conservative and careful than the “average” driver.
Other factors seem to offset the discounts and good-driver credits you get when insuring an electric car. That’s the bad news. One automotive review reports that insuring some of the new hybrid vehicles costs more than insuring a gasoline-only model. This holds true even after the discount for electric cars and alternative fuels.
It seems that the unique design and structure of new electric cars and hybrids are the main reasons for this higher premium. Apparently, the insurance companies see repair and replacement of hybrids and electric cars as riskier. Because there are fewer of them, parts may not be produced in mass numbers as they are with gasoline-powered cars. In simple terms, parts and labor are not as widely available for electric cars.
Add to this the concept that electric cars and hybrids are generally smaller and you have yet another reason for insurance companies to place higher premiums on this type of vehicle. If a small, electric-powered car is involved in an accident it is more likely to be a total loss than a larger, gasoline-powered car. This costs the insurance companies money in the big financial picture.
Fact or Fiction
Some observers of the electric-car scene have found that the “electric discount” is more myth than fact. Results depend on the insurance company, of course. This is still a new field of operations for insurance companies and finance companies. It’s safe to say that not every insurance company is offering coverage for electric cars. Some companies state quite clearly that they will offer insurance on your electric car as a second vehicle only.
If you do find an insurance company that has done its homework and is prepared to provide insurance for your electric car as a second vehicle, you will probably find that the premium costs are lower than for a gasoline-powered car.
One of the key factors you should consider when shopping for electric car insurance is safety. New cars from the larger manufacturers will usually be required to have the same safety features, such as airbags, seatbelts and collision-resistance bumpers. But this is not true throughout the industry. In fact, a few countries don’t require electric cars to meet the same safety standards.
Numbers Will Change
One thing we can probably count on when shopping for electric car insurance – the cost of repair and replacement will go down as more electric vehicles are manufactured and sold. This will translate into lower premiums because insurance companies will see a reduction in expense.
As you can see, the world of electric car insurance is far from settled. There are premium discounts to be found. For now, you may want to rely on saving money in other ways. Fuel costs are significantly lower. This will be a major benefit over time. You may be able to save some money when insuring an electric car instead of a gasoline-powered car. But you may have to shop around!