Fuel2Electric

Motortopia Staff August 30, 2024 EV Education

Everybody is scrambling to adapt to the EV wave sweeping the world of motoring. But as we race towards the crest, one question might be nagging at your heels (or tailpipe): the cost. Upfront, long-term, emotional, and physical. In this article, though, we’ll be discussing something more tangible: whether or not insuring an EV is more expensive than a traditional ICE car.

Is EV Car Insurance More Expensive?

The Anatomy of EV Car Insurance Costs: What’s the Difference? When insurers set their rates, they look deeper than what’s beneath the hood. They evaluate the vehicle’s worth, repair costs, safety credentials, and, of course, the driver’s history. For electric vehicles, several factors come into play.

Value and Repair Costs: The Price of Technology

Electric vehicles carry a higher upfront price tag due to the technology and expensive components required to make them run. For example, the battery pack of an EV alone can cost more than $20,000. It’s not your typical Duracell double A. Repairing sophisticated parts isn’t cheap, and your insurance costs will reflect that with higher replacement and repair costs in premiums.

Safety Features: Silent, Not Deadly

Electric vehicles represent peak automotive safety. Equipped with features like automatic emergency braking, lane-keeping assistance, and collision warning systems, EVs are designed to protect. This advanced safety tech can tilt insurance rates in your favor as an EV driver. Moreover, data suggests that EV drivers tend to drive more cautiously, which insurers appreciate. Nothin’ like being rewarded for your preference.

Insurance Considerations After Implementing Electric Car Conversion Kits

Insuring a converted EV can be a mixed bag. On one hand, the value of the converted vehicle may increase due to the cost of the conversion and the added technology. Additionally, the lifespan of your car can be doubled or even tripled, saving you tons of money in the long run.

On the other hand, the car’s unique nature and potential lack of comprehensive safety features compared to factory-built EVs can lead to higher premiums. Insurers will have to assess the quality of the conversion, the parts used, and the overall safety of the vehicle. That’s why we recommend using professional EV conversion shops—you’ll integrate your beloved car with the next-generation propulsion and technology of a mainstream EV while maintaining its original soul and spirit (and saving on the cost of buying a whole new vehicle).

Many insurers also have special policies regarding unique cars that aren’t based on their book value. What happens when a classic car, driven less than a thousand miles per year, becomes a daily driver after electrification? USAA has a category for these cars that’s based on the value of parts and labor once completed.

The Verdict

So, is EV car insurance more expensive? Often, yes, but not prohibitively so. The higher repair and replacement costs are balanced by potential discounts, incentives, and insurers accounting for advanced safety features.

For those venturing into EV conversions, insurance can be more complex but just as rewarding. Most major carriers won’t delineate from major modifications or replacement value for an OE vehicle. Some will accommodate based on “agreed value,” but that’s not a guarantee of full money back if you convert a $500 Civic into a $30,000 electric street racer.

Additionally, increased insurance costs can be further balanced by state and federal rebates for both factory EVs and conversion projects.

We hope zooming out and understanding these factors won’t leave you, an unsuspecting EV enthusiast, blindsided by insurance costs. Now, you’re armed with the knowledge to navigate the landscape effectively, ready to put your foot down on the phone with your insurance rep. Maybe. Either way, we here at Fuel2Electric are your source for anything and everything EV related—Get in touch with us today about conversion projects, questions, or compliments.

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