Are electric cars more expensive to insure?

I’m a fan of electric vehicles, and despite the higher cost of insuring them the overall cost of ownership is still attractive.

Porsche 992 GT3 Touring in Fjord Green
Porsche 992 GT3 Touring in Fjord Green

Before insurance, I spent over ten years working with luxury automotive brands.

I still love going to cars and coffee events, and my favorite car is a Porsche 992 GT3 Touring in Fjord Green (above).

I’m also a fan of electric vehicles (EVs) despite the higher cost of insuring them because the overall cost of ownership is still attractive.

Tesla Dominates

Tesla accounts for 50-65% of EV sales depending on the year, but as you’ll note below, the brand is more expensive to repair in most categories. I’d still consider getting one and did take a Model Y on an overnight once.

Batteries

Electric car batteries are the primary driver for repair cost difference for two reasons.

  1. EVs that need repairs must often be disconnected from the battery pack and de-energized to start work. This adds several hours of labor time.
  2. Batteries can’t be repaired, so if they are damaged, they must be replaced. Depending on the cell system, the cost can be anywhere from $4,000 to $20,000.

Teslas are the most difficult to repair because the battery packs are built into the car bodies. Repairs are more costly for this reason.

Claims Costs

  • The average claims cost for electric cars was $963 higher than for gas vehicles.
  • If you only look at Tesla, the average claim cost is $1,589 higher.

Repair/Replace

  • 90% of parts for electric vehicles are provided directly by the manufacturer (OEM), compared to 66% for gas vehicles.
  • OEM parts are more expensive, though they are generally also better quality.
  • When electric vehicles are repaired, 5% more parts are replaced rather than repaired.

Paint Time

  • Painting a vehicle makes up about 40% of an average repair order, with electric vehicles taking 30 minutes longer than gas vehicles to refinish.
  • The temperature threshold for “baking” the vehicle after painting and allowing the paint to dry must be kept lower, so more time is needed.

Making EVs easier to repair requires overhauling vehicle designs and factories so EV, hybrid, and gas vehicles can be built on the same production line. BMW has worked toward this with their Nu Classe for the last decade.

Before you take delivery of your new car, it’s good to get an insurance estimate when considering the total cost of ownership. Also, go drive one because nothing beats instant torque.

Unlinked Sources:

Mitchell, August 10, 2023 Latest Mitchell Report Details Collision Claim and Repair Differences Between Electric and Internal Combustion Engine Vehicles