Electric cars typically are more expensive to repair and have more advanced technology. It’s important you have the right policy to protect your investment. In this article, we’ll discuss how and where to purchase electric car insurance.
Electric Car Repairs
Electric cars have more advanced technology than their gas powered counterparts which in turn results in higher repair costs. Also, there are just less manufacturers and parts. Supply and demand will naturally drive up the cost.
There are less qualified mechanics and therefore less competition. Whenever there is less competition, the price goes up. Repair times can also take longer with new mechanics getting trained on the process. Repair costs should come down over time, but for now, expect to see 20%-50% higher costs than gas powered vehicles.
Electric Car Insurance Coverage
Surprisingly, the first coverage you should consider making more robust is your rental car coverage. Many people have rental car coverage limits that are too low and they will run out of coverage before their car is repaired. This is especially important because electric vehicles can take a lot longer to repair due to some of the things we just mentioned: less mechanics, less repair shops and part shortages.
Rental car coverage typically has a per day limit and a total limit. For example, $35/day and $900 total. At $35 dollars per day, which won’t get you much for a rental car, you’ll run out of coverage after 25 days. We’re seeing customers sometimes waiting 6 weeks. This could leave you close to $600 out-of-pocket.
Comprehensive and Collision Coverage is a major consideration as well. Of course, if you have a loan on your vehicle, your lender is going to require you to carry this coverage. However, many times when people have paid off their vehicle loan, they choose to carry liability only.
If you’ve paid off the loan on your electric car it’s probably wise to keep Comprehensive & Collision, “Full Coverage”. With significant repair costs, you have greater financial risk.
Insurance Cost
The cost of insurance for electric cars is definitely going to be higher than gas powered vehicles. Just how much more? For our customers we see an average of about 30% more however we’ve seen a range of 10% – 40%.
Liability only policies will see the smallest difference since it only covers the other person’s vehicle. “Full Coverage” will see a higher increase. We put “Full Coverage” in quotes because it’s not an actual coverage but it’s what many people say when referring to a policy that has Liability, Comprehensive and Collision coverage.
Where to Shop?
Independent agents (like us!) are going to have the most options for you. We’re able to explore many insurance companies and help you unbiasedly choose the best policy for you. We’re not employees of any insurance company.
You can also shop with captive agents like State Farm, Farmers and Allstate. These are salespeople who are employees and have an incentive to recommend their company. Not what we would consider unbiased recommendations.
Consider Bundling
No, this isn’t a Flo from Progressive pitch! But the home and auto bundle discount can be significant. With some companies it can be 20%. However, sometimes it is actually more cost effective to have separate home and auto insurance companies.
We split insurance companies all the time with our clients. Every situation is different and we explore what works best for you. Do you really care if you’re getting a “Bundle Discount” if the bottom line costs more?
Tesla Car Insurance
We’re going to tell your right up front, we’re not a fan. Tesla offers insurance but we feel it’s inferior to a lot of other options. First, Tesla is using other insurance companies for the policy and just putting their name on it.
Even though they are an amazing company that has brought new innovation to the automotive industry, this is not the case for their insurance. One of the biggest issues we’ve seen is a lot of their customers have poor policy limits. This could be due to their system defaulting to the cheapest coverage.
You do not want to own a premium car and then protect your investment with cheap inadequate insurance. That’s just a risk management 101 no, no.
You also won’t have the advice of an independent agent who can help you put together a quality insurance plan for your auto, home, umbrella, life and so on without pushing a specific insurance company.
Conclusion
As you can see, several factors will determine the right car insurance for your electric vehicle. Choosing the right agent is more important than attempting to choose from hundreds of insurance companies and quoting websites. Of course you want a good deal but not at the expense of having adequate coverage.
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