As electric vehicles (EVs) continue to rise in popularity, more drivers are asking a key question: how do insurance costs compare to gas-powered cars? In 2025, with EV adoption accelerating and new data available to insurers, the landscape is shifting. This guide will walk you through what to expect in terms of pricing, risk, and coverage differences between EVs and traditional gas cars.
Whether you’re buying your first Tesla or trading in a sedan for a Chevy Bolt EUV, here’s what you need to know.
Do EVs Cost More to Insure?
Yes — but not always.
EVs typically have higher insurance premiums than their gas counterparts, though the gap is narrowing. This is due to:
- Higher vehicle value
- Expensive batteries and repairs
- Limited availability of EV-certified repair shops
- Longer repair times
However, federal incentives, driver discounts, and lower maintenance risks can offset some of these costs.
Average Premiums in 2025
| Vehicle Type | Average Annual Premium |
|---|---|
| Electric Car | $1,850–$2,300 |
| Gas-Powered Car | $1,300–$1,700 |
| Hybrid | $1,500–$1,900 |
These numbers vary based on model, location, age, driving record, and insurance provider.
Why Are EVs More Expensive to Insure?
🔋 Battery Replacement Costs
Batteries can cost $7,000–$20,000, and any structural battery damage usually means a total loss.
🛠️ Specialized Repairs
EVs often require manufacturer-authorized or EV-certified mechanics. Labor rates are higher, and parts are less available than for combustion engines.
🧰 Tech-Heavy Components
EVs come loaded with sensors, cameras, and ADAS (Advanced Driver Assistance Systems), all of which are costly to fix or calibrate after an accident.
When EV Insurance Is Cheaper
Some scenarios can bring EV premiums below gas cars, including:
- Low-mileage urban drivers
- Telematics-based policies
- Eligibility for EV-specific discounts
- High safety ratings on certain EVs
Insurers like Tesla Insurance, Nationwide, and Progressive are pioneering lower rates for safe EV drivers based on real-world driving data.
2025 Discount Programs to Know
| Program Type | Example Benefits |
|---|---|
| EV Owner Discounts | Up to 10% off for fully electric drivers |
| Usage-Based Insurance | Up to 30% off based on low mileage |
| Green Vehicle Discounts | 5–10% for eco-friendly policies |
| Bundling with Home EV Charger Insurance | Extra savings available |
Pros and Cons of EV Insurance in 2025
| Pros | Cons |
|---|---|
| ✅ Lower maintenance risks | ❌ Higher repair costs for batteries and tech |
| ✅ Eco and tech-savvy driver discounts | ❌ Fewer mechanics and longer repair delays |
| ✅ Usage-based and Tesla-specific programs | ❌ Not all insurers fully understand EV risks yet |
| ✅ Incentives for bundling EV & home coverage | ❌ Premiums still often higher than gas vehicles |
Best Insurance Companies for EVs in 2025
| Provider | EV Coverage Highlights |
|---|---|
| Tesla Insurance | Real-time tracking, tailored for Tesla drivers |
| Progressive | Green vehicle discounts, usage-based plans |
| Liberty Mutual | Certified EV repair shop network |
| State Farm | Custom equipment coverage for chargers & converters |
| GEICO | Moderate rates; good for entry-level EVs |
FAQs
Q1: Are EVs harder to insure in rural areas?
Yes. Insurers may charge more in regions without EV-certified repair centers due to longer tow distances and repair delays.
Q2: Will my home charger be covered by my car insurance?
Not automatically. You’ll need a homeowner’s rider or equipment protection add-on to cover wall chargers and installation.
Q3: Do EVs qualify for usage-based insurance?
Absolutely. EVs are ideal for usage-based programs due to frequent short-range driving. These programs can lead to steep discounts if you drive less than 7,500 miles per year.