Are electric cars cheaper to insure? A complete guide to electric car insurance

Are you thinking of buying an electric car? There are lots of benefits to purchasing an EV, including lower running costs and reducing your carbon footprint.

But where do you stand when it comes to insuring an electric car? Read on to learn everything you need to know about insuring electric vehicles, including whether your home EV charger will be covered by your policy.

What is electric car insurance?

Electric car insurance is the same as insurance for petrol and diesel cars. It's there to protect you should anything happen to you or your vehicle.

Having said this, electric cars don't operate in the same way as standard vehicles. These mechanical differences can increase insurance premiums as it is more expensive to service and repair electric vehicles than petrol or diesel equivalents.

What are the different types of electric car insurance?

As with any car, you can choose from three electric car insurance policies. These are:

1. Third-party insurance

This covers you for damage you may cause to other road users and their property. Third-party insurance is the legal minimum requirement for car insurance.

2. Third-party, fire and theft

This covers you for damage to other road users and their property, and you'll be protected if your car is stolen or damaged by fire.

3. Comprehensive cover

As well as being covered for third party, fire and theft, you'll also be covered for any damage to your vehicle if you get into an accident.

How much is electric car insurance?

Electric car insurance costs can vary due to different factors, from the driver's age to yearly mileage and the make and model of the car.

Although EVs are generally smaller and less powerful than fuel-powered vehicles, insurance costs are typically more expensive. One of the reasons for this is the increased cost of repairs.

With this being said, EV drivers may be looked upon favourably by insurers as they are seen to be more 'responsible' and 'less likely' to drive dangerously or end up in a car accident. 

Additionally, electric vehicles are much more technologically advanced than regular vehicles.

When shopping for electric car insurance, you should check price comparison sites and get quotes from various companies, including bespoke electric car insurers, to help you find the best value deal.

What impacts the cost of electric car insurance?

Electric cars can be more expensive to insure than petrol and diesel cars for these four reasons:

1. Higher initial cost: The value of a vehicle is a significant factor in how much insurance premiums cost, and electric cars are generally more expensive to purchase than their petrol and diesel counterparts.
2. Cost of repairs: Although electric vehicles have fewer moving parts, repairing them is usually more expensive. This is because parts are more costly, and EVs often need to be fixed by specially trained mechanics.
3. Battery replacement: The battery is one of the most expensive and crucial components in an electric car, so insuring a vehicle with a costly battery pack can add to the overall insurance expense.
4. Lack of data: Insurance companies rely on historical data to assess risks and set premiums. Because electric cars are relatively new to the market, there may be a need for more data relating to performance and repairs, leading to higher insurance premiums.

Things to consider before choosing electric car insurance

With electric vehicles, there are other things you need to keep in mind when looking for cover. 

For one, it's common for an electric vehicle owner to buy the vehicle and lease the battery from the manufacturer. In this case, there may be a contracted agreement for the mileage you use within this time. 

Alternatively, you can buy the vehicle battery yourself, but you'll have to pay for any replacements, which can be pretty costly.

You should always have a charging cable cover for your vehicle if required. You may not need to worry if you have an EV charger installed at home. However, if you use a public charging point, e.g. on the roadside, you should look into protecting your cable through insurance.

The benefits of electric car insurance vs. petrol and diesel counterparts

If you choose an electric car, there are some key financial advantages, including:

• Pure electric vehicles are exempt from road tax: EV drivers do not have to pay road tax because they produce no exhaust emissions.
• Grants: Some electric car owners may be eligible for funding up to £350 to help pay for purchasing and installing an EV charging point at home. Additionally, some low-emission vehicles qualify for a Government grant.
• Perks from insurers: Some insurance companies offer incentives to encourage more EV drivers to use their services, including reductions on premiums and even making charitable donations on your behalf. 

Are there any drawbacks?

You should always shop around before switching to electric and make sure you find out about insurance costs too. Not all insurers offer electric vehicle insurance premiums, so research is crucial to getting the best deal.

As well as your electric vehicle insurance, you should consider what vehicle you need and whether you require a home charging point. 

If you're worried about waiting to use public chargers, BOXT can install an EV charger in your home as early as tomorrow! Add a few details about your EV and home to our Find an EV tool, and we'll recommend suitable chargers with a fixed-price quote, including installation.

Take a look at our dedicated EV charging guides for additional information and tips, like the best EV charging apps, how long it takes to charge an electric car and more.