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rental car damage and liability insurance

Insuring an electric vehicle (EV) can cost more than insuring a gas-powered car, mainly due to:

  • Higher sticker prices - EVs have larger MSRPs than gas cars

  • Specialized repairs - EVs need EV-certified repair shops and mechanics

This means insurance companies may have to pay more for:

  • Collision coverage - To fix/replace a damaged EV

  • Comprehensive coverage - If an EV is stolen

  • Rental reimbursement - To pay for a rental while an EV is being repaired

So EVs often have higher insurance premiums to cover these increased costs. However, there are ways to find more affordable EV insurance.

Comprehensive coverage for electric vehicles is not so different than a regular one

Types of auto insurance coverage

There are several main types of auto insurance coverage to consider when insuring an electric vehicle:

Liability Coverage

This covers bodily injury and property damage that you cause to others in an accident when you are at fault. There are two main components:

  • Bodily injury liability - Pays for medical expenses and lost wages for injured parties

  • Property damage liability - Covers damage you cause to another vehicle or property

Liability coverage does not pay for any damage to your own vehicle or injuries to you or your passengers.

Collision Coverage

This pays for damage to your own vehicle after an accident, regardless of fault. For example, if your EV is totaled after being hit by another driver, collision coverage would pay for the cost to replace your EV.

Deductibles apply, meaning you pay a set amount out of pocket before coverage kicks in. Higher deductibles equal lower premiums.

Comprehensive Coverage

This covers non-collision damage to your EV, including:

  • Theft

  • Vandalism

  • Weather events like hail or floods

  • Collisions with animals

Like collision, comprehensive coverage has a deductible. Many lenders require comprehensive and collision coverage to finance a vehicle purchase.

Uninsured Motorist Coverage

Uninsured motorist coverage pays for injuries and vehicle damage caused by a driver with no insurance who is at fault. There are two types:

  • Uninsured motorist bodily injury - For medical expenses

  • Uninsured motorist property damage - For vehicle repairs

This protects you in hit-and-run scenarios or accidents with uninsured drivers.

Additional Coverages

Other add-ons may include:

  • Rental reimbursement - For rental car costs while your EV is being repaired

  • Roadside assistance - For towing and labor if your EV breaks down

  • Gap insurance - Covers the difference between what your EV is worth and what you owe if it's totaled

Choosing the right coverage levels involves balancing premium costs with your risk tolerance. Higher limits mean better protection.

Factors affecting electric vehicle insurance costs

When shopping for EV insurance, premium costs can vary widely between providers. Here are some key factors that affect how much you'll pay:

Vehicle MSRP

Insurers set rates partly based on the value of the vehicle being insured. Since EVs have higher sticker prices than gas cars, this drives up premiums. For example:



Nissan Leaf


Tesla Model 3


A Model 3 may cost almost 2x more to insure than a Leaf due to the $20K+ difference in MSRP.

Repair Costs

Specialized repairs for EVs cost more than gas car repairs. Some factors leading to higher repair bills:

  • Limited availability of EV mechanics and body shops

  • High cost of replacement EV batteries - up to $20,000

  • Potential delays getting necessary parts

Since insurers foot the bill for repairs, higher costs get passed on through higher premiums.

Availability of Discounts

Discounts can substantially reduce EV insurance costs. However, discounts like:

  • Good driver

  • Good student

  • Multi-policy

  • Anti-theft devices

May not apply to EVs. Shop around for companies offering EV-specific discounts when possible.

Driving History

Your personal driving record plays a big role in determining your rates. A clean record with no accidents, speeding tickets, DUIs, etc. will result in lower premiums.

State Minimums

Most states require drivers to carry at least a minimum amount of liability coverage. However, state minimums may not provide sufficient protection. Carrying more than the minimums will increase costs but reduce financial risk.

Understanding these key factors can help drivers anticipate costs and make informed insurance decisions when buying an EV.

Ways to save on electric vehicle insurance

While insuring an EV is likely to be more expensive than a gas vehicle, here are some tips to potentially lower your premiums:

Shop Around for Quotes

Rates can vary significantly from insurer to insurer. Comparing quotes from multiple companies is the best way to find the lowest price.

  • Get quotes from national carriers like Geico, Progressive, etc.

  • Check quotes with regional providers in your area

  • Use independent agents/brokers to compare many insurers

Shopping around annually can catch any better rates as companies adjust pricing.

Ask About Discounts

Different insurers offer their own mix of discounts. Ask representatives what discounts they offer for EVs specifically. Some options to ask about:

  • Low mileage

  • EV safety features

  • Telematics programs

  • Bundling with home insurance

Taking advantage of multiple discounts can lead to substantial savings.

Raise Your Deductible

Deductibles represent what you pay out of pocket before insurance coverage kicks in after an accident.


Premium Reduction







Raising your deductible to $1,000 or $2,500 can potentially slice your premiums substantially. Just be prepared to pay more upfront if you ever need to file a claim.

Consider Pay-Per-Mile Insurance

With pay-per-mile insurance, you pay a base rate plus a per-mile rate based on how much you drive. This can be cost-effective for low-mileage drivers. However, high-mileage drivers may pay more overall.

Pay-per-mile insurance offers another way EV drivers can potentially save compared to traditional policies. Not all insurers offer this option though.

Taking a multi-pronged approach of combining these tips can help drivers find the most affordable EV coverage.

Where to purchase electric vehicle insurance

You have several options when it comes to purchasing auto insurance for your electric vehicle:

Major Insurance Companies

Most large national insurers like Geico, Allstate, and State Farm offer EV insurance policies. You can:

  • Get quotes directly through their website

  • Call to speak with an agent

  • Visit a local agent office if available

The major insurance companies have competitive rates and offer all standard types of auto insurance coverage.

Regional and Local Insurers

Beyond the big national brands, check rates from insurers focused on your state or region. These companies may offer:

  • Competitive pricing

  • Discounts for being a local customer

  • High level of service from local agents

Some top regional auto insurers include:

  • Erie Insurance

  • Auto-Owners Insurance

  • Liberty Mutual

Independent Insurance Agents

Independent agents represent multiple insurers. They can compare quotes across multiple companies to find you the best deal. Working with an independent agent allows you to:

  • Get quotes from several insurers at once

  • Identify any EV-specific discounts you qualify for

  • Avoid doing all the legwork of contacting companies yourself

Independent agents have expertise navigating the auto insurance market.

Tesla Insurance

If you own a Tesla vehicle, check rates from Tesla Insurance. They leverage real-time driving data from Tesla cars to price policies based on your driving safety habits. However, Tesla Insurance is not yet available nationwide.

No matter what route you choose, give yourself time to compare multiple quotes and weigh all policy options to find the optimal EV insurance solution.

Benefits of electric vehicles

Beyond potential insurance savings, there are a number of benefits drivers may enjoy by switching to an EV:

Reduce Environmental Impact

A major advantage of choosing an electric vehicle is reducing your carbon footprint. EVs produce zero tailpipe emissions. This benefits the environment since:

  • Gas cars emit greenhouse gases like carbon dioxide

  • EVs eliminate these harmful exhaust emissions

  • Charging an EV mostly relies on electricity from renewable sources

While EVs aren't fully zero-emission, they significantly reduce the impact of driving on climate change.

Lower Maintenance Costs

EVs require less routine maintenance than gas-powered cars. With an EV, you'll avoid expenses like:

  • Oil changes

  • Air filter replacements

  • Engine belt/hose replacements

  • Tune-ups

Without a high-maintenance internal combustion engine, owning an EV can save you money on upkeep costs.

Potential Fuel Savings

It's almost always cheaper to "fuel up" an EV by charging it than paying for gasoline. For example:

Fuel Type

Cost Per Gallon Equivalent





With gas prices fluctuating wildly, electricity offers more stable and predictable refueling costs for your EV.

Government Incentives

Purchasing an electric vehicle may qualify you for:

  • Federal tax credits up to $7,500

  • State/local rebates up to $4,000 in some areas

These incentives can help offset the higher sticker prices of EVs.

The long-term cost-savings and environmentally friendly benefits make EVs an appealing choice over gas-powered alternatives for many drivers.

Additional electric vehicle incentives

Beyond finding affordable insurance, there are government incentives that can help lower the overall cost of EV ownership:

Federal Tax Credits

A federal income tax credit up to $7,500 is available for purchasing certain makes and models of electric vehicles. Details:

  • The credit amount varies based on the vehicle's battery capacity

  • Credits phase out once an automaker sells over 200,000 EVs

  • You must owe at least as much in federal tax as the credit amount

Currently, buyers can still get the full $7,500 credit for:

  • Audi

  • BMW

  • Hyundai

  • Kia

  • Volvo

  • Ford (some models)

The credit lowers your tax bill dollar-for-dollar. So a $7,500 credit would reduce your federal tax liability by $7,500 when you file.

State and Local Rebates

Some states, cities, and utilities offer cash rebates and other perks for buying an EV, such as:

  • California - up to $4,500 cash back

  • New York - $2,000 rebate

  • Colorado - $2,500 tax credit

Additional perks may include reduced registration fees, EV charging credits, HOV lane access, etc.

Research programs in your area before purchasing an EV to identify any incentives or rebates you can leverage.

Combining tax credits and local rebates with insurance savings makes EVs even more affordable. Just be sure to consult your tax advisor to understand how credits will impact your tax return.


Below are answers to some frequently asked questions about insuring electric vehicles:

Why is insurance more expensive for electric cars?

There are a few key reasons EV insurance costs more:

  • Higher sticker prices - EVs have larger MSRPs which increases replacement cost

  • Specialized repairs - EVs often need special parts/shops making repairs pricier

  • Limited discounts - Insurers offer fewer discounts for EVs compared to gas cars

Since repairs and replacement are more expensive for EVs, insurers charge higher premiums to cover potential claims.

Where can I get insurance for my electric vehicle?

You have several options for purchasing EV insurance:

  • Major national insurers like Geico, Allstate, etc.

  • Regional and local insurance companies

  • Independent insurance agents/brokers

  • Tesla Insurance - for Tesla vehicles only

Most major insurers treat EVs the same as gas cars when selling standard policies. But shop around for any EV discounts available.

Will insurance cover electric car batteries?

Yes, your auto policy will cover your EV battery, but the specifics depend on your coverage:

  • Collision coverage pays if your battery is damaged in an accident

  • Comprehensive coverage pays if your battery is stolen, vandalized, etc.

  • Warranties may provide some battery coverage for defects/failures

Any damage not due to a covered peril would not be covered, like gradual battery degradation over time.

Are EVs cheaper to maintain and insure long term?

Over the life of the vehicle, EVs generally have:

  • Lower maintenance costs without oil changes, tune-ups, etc.

  • Lower "fuel" costs charging on electricity vs. gas

However, insurance costs tend to remain higher for EVs than gas cars. The long-term maintenance savings help offset the higher insurance premiums.

Understanding common EV questions helps drivers make informed insurance decisions. Be sure to discuss your specific EV situation with insurance agents to get the right protection.


In summary, insuring an electric vehicle differs in some key ways from insuring a traditional gas-powered car:

  • Premiums are typically higher - Due to increased replacement costs and repair expenses

  • There are fewer discounts available - So take advantage of any you qualify for

  • Shop around to find the best rates - Quotes can vary widely between insurers

However, EVs provide many benefits that may outweigh the insurance drawbacks:

  • Lower environmental impact with zero tailpipe emissions

  • Reduce gasoline expenses by powering your car with electricity

  • Lower maintenance costs without oil changes, belt replacements, etc.

  • Government incentives like tax credits and local rebates

Tips for finding affordable EV insurance:

  • Compare quotes from at least 3 insurers

  • Ask about all available discounts

  • Raise your deductible to reduce premiums

  • Consider pay-per-mile insurance if you drive fewer miles

Finding the right auto insurance coverage is important for protecting your electric vehicle investment. We recommend:

  • Purchasing more than just basic state minimum liability limits

  • Adding comprehensive and collision if financing your EV

  • Understanding exclusions like battery degradation before choosing a policy

With the right insurance provider, you can find an affordable premium that fits your budget while giving you robust protection. Reach out today to discuss your specific EV insurance needs. We're here to provide personalized solutions to this rapidly growing segment of drivers.

Other readers were also interested in the following posts:

How will Battery Electric Vehicles (BEV) affect the auto insurance industry?

How does driver assist technology affect car insurance premiums?

10 Easy Ways to Lower Your Electric Vehicle Car Insurance Rates

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