How Insuring Electric Vehicles Changes Premiums

The type of car you drive has a significant impact on how much your auto insurance premiums are, and there are a few special ways that driving an electric or another eco-friendly vehicle might impact your premiums. Here's how driving an electric vehicle can both raise and lower different parts of your auto insurance premiums.

Higher Repair Costs Raise Collision Premiums

Electric and other eco-friendly vehicles tend to cost more to repair than traditional, gasoline vehicles do. The higher repair costs of electric vehicles come in the form of both higher parts fees, for electric vehicles often have pricey specialized parts, and higher labor costs, for fixing electric vehicles often requires advanced knowledge that commands a premium labor rate.

The higher repair costs of electric vehicles mean that your insurance company will need to pay more if your vehicle is damaged in a collision. Your insurer must consider this higher cost when setting rates for collision coverage, which pays to repair your car if it's damaged, and the insurer passes on their potential higher costs in the form of slightly higher collision premiums.

Increased Safety Reduces Personal Injury Protection Premiums

When compared to gasoline-powered vehicles that have the same passive and active driver-assist technologies, electric vehicles tend to be safer. 

This isn't because of any safety-specific feature that they have, but it's instead caused by their heavier weight. The added weight of a battery and other specialized equipment give electric vehicles more momentum — and more momentum can help protect the people in a vehicle if there's an accident. You and your passengers, thus, are less likely to be injured in a collision.

Because you and your passengers are less likely to be injured in a collision, your insurance company is less likely to have to pay on an injury-related claim that you or a passenger files against the policy. As a result, your insurer can lower your personal injury protection premiums slightly.

Personal injury protection is the portion fo your auto insurance policy that covers injuries you or passengers in your vehicle sustain during an accident. It's often abbreviated PIP.

Discount for Driving and Environmentally Friendly Vehicle

Some auto insurance companies offer drivers who own environmentally friendly vehicles a discount on their premiums simply because these vehicles are better for the world. Whether this discount is available to you depends on your insurer and the state, but it can save you a significant amount if the discount is available.

For more information, contact an auto insurance service.

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