The war in Iran and the subsequent disruption of maritime traffic in the Strait of Hormuz have driven gas prices up over the last month. The national average price for a gallon of regular gas has gone from $2.98 on February 26 to $3.98 on March 26. The high prices could push new-car buyers toward hybrid and electric cars instead of gas-powered models.
But with a new car comes the need for new car insurance. And what you'd save by avoiding the pump could be negated by high insurance costs — electric vehicles are typically more expensive to insure.
Shopping around for the best rate can help offset this cost. CNBC Select reviewed more than a dozen car insurance companies and picked four that stand out. (See our methodology for more on how we chose the best electric car insurance companies.)
We want to hear your story. Do you have a financial success, goal or stressor you're comfortable sharing with a reporter? Please fill out this quick form.
Shop for the best car insurance
The best electric car insurance
Best for low-mileage drivers: Lemonade
Who's this for? Lemonade's car insurance uses mileage to determine prices, so those who drive less pay less for coverage.
Standout benefits: Hybrid and electric car drivers get a few perks with Lemonade, including coverage for your charger and emergency charging if your battery dies on the go. Drivers will also receive a discount for owning an electric or hybrid car, which other pay-per-mile insurers don't offer.
Lemonade Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Lemonade offers coverage for a variety of scenarios, including: car crashes, highway stalls, damage from fire, vandalism and weather, damaged glass and windshield, if you're sued for liability and if your car gets stolen
Terms apply.
Best for bundling: Travelers
Who's this for? Shoppers who want to score a deal by bundling other types of insurance along with their auto policies should consider Travelers. The company offers homeowners insurance, condo insurance, renters insurance and other types for bundling.
Standout benefits: Travelers has discounts available for both hybrid and electric cars, making it one of the few insurers to do so.
- Lower rates
- Discount for hybrids/EVs
- Not available in all states
- Some discounts not available in every state
- Below-average customer satisfaction scores
Best for new electric cars: Geico
Who's this for? Geico's new vehicle discount of 15% is available for cars less than three years old, which can help make insurance more affordable after a big purchase. After all, new hybrid and electric vehicles can range in price from $30,000 to $200,000 and beyond, depending on the make and model.
Standout benefits: If you have another car in your garage — electric or not — Geico has a multi-car discount of up to 25%.
- 16 discounts are available to lower premiums
- Easily purchase and manage policy online
- Policy add-ons can include roadside assistance and mechanical breakdown insurance
- No gap insurance
- Few branches for in-person services
- Ranks below average for customer service and claims on J.D. Power surveys
Best for families: State Farm
Who's this for? State Farm offers generous discounts for families with new drivers and student drivers, including a student discount of up to 25% and a discount for enrolling in an approved driver education course.
Standout benefits: State Farm also offers a generous bundling discount if you like to keep all of your policies in one place.
State Farm Auto Insurance
Policy highlights
The largest auto insurer in the U.S., State Farm has an excellent reputation for customer satisfaction and affordable rates, even for teens.
Discounts
More than a dozen discounts, including for safe driving, bundling and good students. Drive Safe & Save program offers up to 30% off for lower mileage and safe driving habits.
Availability
State Farm liability car insurance is available nationwide except for Massachusetts and Rhode Island.
Terms apply.
Read our State Farm auto insurance review.
Pros
- High customer satisfaction ratings
- Available in most states
- Affordable rates for teen drivers
Cons
- Doesn’t offer gap insurance
- Accident forgiveness requires 9 years accident-free
- Have to work with an agent to buy a policy..
Are electric cars more expensive to insure?
EV drivers pay 49% more for coverage than drivers of gas-only vehicles, according to data published last year from the insurance shopping platform Insurify. The average cost to insure an EV was $4,058 per year, while a gas-powered vehicle cost $2,732 per year.
There are a few reasons why: higher price tags on these types of cars make replacing a vehicle more expensive than its gas-powered counterpart. Additionally, finding parts and qualified technicians for electric vehicles can be more difficult.
Are hybrid cars more expensive to insure?
Hybrid cars, which run on a combination of gas and electric, tend to cost $20 to $30 more per month than gas-only counterparts according to data from Insurify. However, insuring hybrids tends to cost less than electric-only cars. That's because hybrids tend to have higher prices than gas-only cars, but lower sales prices than fully electric cars. They can also have more expensive or hard-to-find parts than gas-powered cars.
How to save on hybrid or electric car insurance
Despite the higher costs, there are a few ways you can save on car insurance for an electric vehicle or hybrid, including:
- Raise your deductible: Your deductible is the amount you'd pay if you were involved in an accident. Increasing your deductible from $200 to $500 could help you save 15% to 30% on your comprehensive and collision coverage, according to the Insurance Information Institute.
- Bundle your home and auto insurance: Whether you rent or own your home, getting your auto insurance and renters or homeowners insurance from the same company could help you get a discount, typically between 15% and 25%.
- Increase your credit score: In most states, your credit score can be part of the calculation for your insurance premium. Drivers with what's considered poor credit (a FICO score below 579) pay an average of 105% more for full coverage than those with excellent credit (a FICO score of 800 or above), according to data from Bankrate.
Electric vehicle insurance FAQs
Is electric car insurance more expensive?
Yes, electric car insurance tends to cost more than gas-powered car insurance. Data from Insurify published last year found that electric car drivers pay 49% on average more in insurance than gas-powered car owners. However, you can save by comparison shopping and raising your deductible.
Does car insurance cover EV battery replacement?
If your electric car's battery is damaged in an accident, your policy will pay to repair the part or replace it if it isn't fixable.
Do electric cars require specific insurance?
You can insure your electric car with the same insurance you'd use to cover any gas-powered vehicle.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of car insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best car insurance.
Our methodology
To determine which auto insurance companies are best for electric vehicles, CNBC Select analyzed over a dozen U.S. insurance companies. We focused on the following features:
- EV discount: We reviewed the availability of discounts for electric car drivers.
- Cost: Using premium data from The Zebra, we looked for companies with the lowest rates for popular electric cars.
- Availability: Companies that were available in more states were given additional weight.
- Customer satisfaction: We reviewed companies' ranking on J.D. Power customer satisfaction surveys and the volume of complaints reported to the National Association of Insurance Commissioners. We also considered a carrier's Better Business Bureau grade.
- Online access: We gave priority to brands with online quotes.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
Based on these criteria, the companies with the best car insurance for electric vehicles are:
- Best for low-mileage drivers: Lemonade
- Best for bundling: Travelers
- Best for new electric cars: Geico
- Best for families: State Farm
Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
