Electric Car Insurance: Is EV Insurance More Expensive?
Electric Car Insurance: Is EV insurance more expensive?
Electric cars have a number of benefits that pip petrol and diesel vehicles. Why else would over 1,300,000 UK drivers have made the switch already?
But what about electric car insurance? Is it more expensive than petrol and diesel vehicles?
In our guide, we cover everything you need to know about electric car insurance: how much, where you can get it, and how it compares in price to petrol and diesel cars.
Quick Summary:
- Unfortunately, electric car insurance, on average, is more expensive than petrol and diesel vehicle insurance. Factors such as risk, technology, repair, and the higher retail prices of electric cars all add to the high cost of electric car insurance.
- Just like petrol and diesel vehicles, electric vehicle car insurance is available from a number of insurance providers.
Can you get insurance for an electric car?
Absolutely – you can get car insurance for electric vehicles. Just like ICE vehicles, you need to ensure you’ve insured your EV to be road-ready.
The level of cover will vary depending on what you choose, but usually, you’ll get comprehensive cover for all the usual factors —accidental damage, fire and theft.
On top of this, you can get or add EV-specific requirements. For example, EV charging cable cover, lithium-ion battery cover, and sometimes ‘running out of charge’ cover, depending on the policy you choose. Though rare, some even cover wall boxes.
Is it hard to get insurance for electric cars?
Not at all. Often, in an effort to fearmonger, people will question and query everything regarding something new – EVs are no different. Curiosity or concern, either way, it happens with something new… until it’s not.
But an electric car is still a car. Just like MOTs and taxing your car, legally, you have to insure your car to drive on UK roads. So, why would the government make it hard to do so?
Truthfully, it’s just as easy to insure your electric car as it is with an ICE vehicle. A quick online search will bring up your options for EV insurance.
All the recognised insurance companies offer electric car insurance. Here’s just a handful: Admiral, Direct Line and LV+ Insurance. Even companies like John Lewis offer EV insurance. Rather mainstream, we think.
Compare EV insurance on comparison sites, too, and find the best electric car insurance price for you.
Is electric car insurance more expensive than ICE vehicles? Electric car insurance vs petrol.
Frankly, yes, hybrid and battery electric car insurance, on average, is more expensive than insurance for petrol and diesel vehicles in the UK – especially for premium, luxury brands. We won’t shy away from that fact.
According to Nimble Fins, the average cost of electric car insurance is £645, but it can range from £400 to £1,000. In contrast, the average cost of car insurance for petrol cars is £622 between April and June 2024.
But take this with a pinch of salt. Insurance policies base their policies on a number of variables, so there is no fixed price. More often than not, the true electric car insurance cost will vary dramatically depending on the individual – and the type of car.
Sometimes, electric car insurance can actually be cheaper than ICE vehicles. Of course, insurance on a second-hand, cheaper model EV for a driver who has been driving all their life will be cheaper than insurance on a brand new Mercedes for a newly passed driver. It’s all relative.
Will EV insurance always be a minefield when it comes to costs? Most likely, no. As more and more electric vehicles cruise on UK roads and eventually take dominant market share, EVs will become the norm, and the cost of insuring will likely come dramatically down.
Why is Electric Car Insurance More Expensive than ICE vehicles?
A number of key areas affect the cost of electric car insurance in the UK. Let’s take a deep dive into what makes up EV insurance:
1. Risk
Arguably, the most impactful variable on EV insurance is the risk factor. Through intense research, we’ve found that insurers state that the risk levels are higher with EVs than ICE vehicles.
One of the benefits of electric cars is its quick and smooth acceleration. But, more often than not, drivers unfamiliar with this may be shocked at the instant surge of power and, potentially, be more susceptible to accidents. Since insurance is a risk-based industry, it makes sense that the perceived risk is featured in the cost. As more people transition to electric and become familiar with the drive, this risk will be lower, and insurance costs will likely decrease.
What’s more, rumours that electric cars are more likely to set on fire may add to the risk, as well – despite it being mythbusted. For example, the Swedish Civil Contingencies Agency stated that EVs are 20 times less likely to catch fire than petrol and diesel cars.
2. Technology
EVs are new technology with specialist components. Some parts, namely electric motors and the lithium-ion batteries – aka the heart of your electric car – are expensive, and insurance companies will know the value of these parts.
In fact, the battery is the most valuable part of an EV, sometimes making up 30-50% of the car’s overall cost. A damaged or malfunctioning battery can be expensive to replace, so insurers consider this risk when setting premiums.
3. Time and availability of repair
Research suggests there is a lack of EV experts in the UK, leading to longer repair times. Parliamentary evidence from the Association of British Insurers claims that batteries take 14% longer to repair. With this, insurance providers will have to provide a courtesy car for longer, adding to the higher policy cost.
4. Higher EV Price
Electric cars have a higher retail price than petrol and diesel cars. Since insurance rates are partially based on the value of the car, car insurance for electric cars will naturally be higher when the price tag is, too.
Is there a way to lower electric car insurance?
If you’re looking to buy EV insurance, take note of our ways to scout the best deals:
- Compare Insurance Providers: Not all insurers price EV coverage the same way, so shopping around and comparing quotes from multiple providers is essential. Using a price comparison site such as Compare the Market is a great way to get an easy, broad view of EV insurance prices.
- Bundling Insurance: If you already have a home or life insurance policy, why not tag on your electric car insurance, too? Usually, insurance providers will provide you with generous discounts for combining all your insurance in one place with them.
- Usage-Based Insurance: Some insurers provide discounts based on your actual driving habits. If you don’t drive much, you might be able to save with a pay-per-mile plan.
- EV-Specific Discounts: As EVs are generally better for the environment, some insurers offer discounts specifically for eco-friendly vehicles.
What is the best electric car insurance in the UK?
Insurance is a personalised business and is based on your choice. With this in mind, we feel there is no singular best EV insurance providers.
Although, due to the infancy of the EV industry, we would choose a trusted, reputable and well-known EV insurance company for peace of mind.
Easily browse some available electric car insurance with our quick links:
Conclusion:
Electric car insurance is readily available and, while more expensive, is a necessary evil in the UK.
As the EV market continues to blossom, it’s likely we’ll see more policies and competitive pricing, which will ultimately help to bring down electric vehicle insurance costs. The imminent ban on the sale of new petrol and diesel vehicles in 2035 will help push this forward, as well.
Want to make charging your electric car cheaper?
Invest in a home or workplace EV charger to recover the EV car insurance cost. Convenience and cost saving at its finest.
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