Does it Still Cost More in 2025?

Are car insurance rates higher for EV cars?

Drivers can generally expect to pay higher premiums for electric cars compared to internal combustion engine (ICE) cars. 

“The cost of your insurance is based on the value of your car, your location, and your individual factors,” explains Heather Zoller, a Maryland-based Certified Insurance Counselor.

That said, Zoller hasn’t necessarily seen a drastic difference in premiums between EVs and ICE cars among her clients. This may be due to car buyers shopping solely for either an EV or an ICE, rather than comparing the costs of owning the EV versus the ICE of a particular make and model.

For example, a car buyer might not choose between the EV Ford Mustang Mach-E (starting MSRP of $46,895) and the gas model Ford Mustang (starting MSRP of $27,770), but instead between the Mustang Mach-E and the Tesla Model 3 (starting MSRP of $43,990). Such car buyers may compare the cost of insuring the two EVs, rather than comparing the cost of insuring an electric versus gas vehicle.

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EV vs. gas model car insurance rates

Understanding the full cost of owning an EV compared to its gas-powered counterpart requires comparing the difference in car insurance rates. Here are the car insurance rates for EVs versus their gas model counterparts (where available), based on Insurify data.

Why does it cost more to insure an electric vehicle?

Several factors influence the higher cost of premiums for electric car insurance:

• EVs are more expensive than comparable ICE cars.

• EVs repairs may require specialized knowledge or equipment.

• EV battery damage may require special safety protocols.

• EV batteries are expensive to replace, costing up to $15,000 — and that doesn’t necessarily include labor.^[2] For comparison, a replacement battery for a gas vehicle generally costs between $45 and $250.

Here are the starting MSRPs for EVs compared to their gas-powered counterparts, where available, according to Kelley Blue Book. These price differences help explain the potentially higher cost of electric car insurance.

How much is car insurance for electric vehicles or hybrids per month?

Insurify’s research found that the average monthly cost for car insurance for a gas engine car is $248, while the cost for an EV is $357. That’s a 44% difference in premium costs. But why do EVs cost so much more to insure?

As of 2015, “electric vehicles were associated with fewer collision and property damage liability claims, but increased severity [of those claims],” according to the Insurance Institute for Highway Safety.^[3] In other words, while electric vehicle owners made fewer claims (and were presumably in fewer accidents), the claims they made were for more severe damage, which costs more to fix. 

Since 2015, the difference in severity between EV and ICE insurance claims has diminished, according to the 2020 Highway Loss Data Institute bulletin — but insurance premium differences are still evident.

“It can take the insurance industry a few years to analyze losses with new technology,” Zoller says. “The industry is keeping an eye on fires in EVs right now, for example.”

That means the cost of electric car insurance may change. If the trends outlined by the HLDI bulletin continue, those costs may go down.

Electric vs. gas car insurance costs by year

The average cost of car insurance for gas and electric cars increased over the past two years, but gas model cars are still slightly less expensive to insure. In 2023, the average cost of car insurance for an EV is 26% higher than for gas-powered vehicles. But the good news is, the cost gap appears to be closing. In 2021, that cost difference was 37%.