Slide 1. Introduction.
The class develops the cost of insurance for electric vehicles and its implications for fleet management.
Slide 2. The cost of insurance for electric vehicles.
One of the most notable advantages associated with purchasing and using an electric vehicle is the reduction in maintenance costs, a feature that is also observed, albeit to a lesser extent, in the case of hybrid vehicles. However, when taking out insurance for this type of vehicle, these advantages can be completely offset.
The price of insurance for hybrids and electric cars is higher than for internal combustion cars.
A study carried out by the insurance comparison website Insurify in the United States confirms the above. This company, an insurance comparison website, points out that the cost of an electric car is, on average, up to 49% more expensive than that of an equivalent combustion engine car in the United States.
Insurify examined more than 97 million quotes in its database, sourced through integrations with partner insurance companies, to determine average auto insurance rates for gasoline-powered cars and electric vehicles.
According to the figures presented in the report, in the United States, where insurance costs are significantly high, the average comprehensive insurance policy for electric vehicles is $4,058 per year, while that for equivalent combustion engine vehicles is $2,732 per year.
- Because it costs more to insure an electric vehicle.
Insurers base their prices on risk, and insuring a car that is more expensive to repair or replace than a combustion engine car increases the company's financial risk.
- Total loss.
In the event of a total loss, given the high price of electric cars, the amount that the insurer must pay the customer is very high.
- More expensive replacement parts.
Electric vehicles cost 22% more to repair than gasoline cars, according to Mitchell's EV Collision Insights report conducted in the United States. The average price of a new electric vehicle was 57,734 dollars in June 2025, while the average for gasoline vehicles was 48,799 dollars in June 2025. In the event of a total loss, insurers could pay an average of 18% more to replace an electric vehicle.
- Longer repair times.
Electric vehicles also require more mechanical labor hours: 3.04 hours versus 1.66 hours for gasoline cars. Since many electric vehicles require original manufacturer parts, mechanics cannot draw on a large inventory of alternative and recycled manufacturer parts, which often reduces repair costs for gasoline cars.
- The cost of repairing or replacing the battery.
Replacing or repairing the battery is very expensive. The battery can cost up to a third of the price of the electric vehicle. However, the average price of electric vehicle batteries is falling, and a 2024 report by Goldman Sachs projects that it will continue to fall over the next five years.
- Advanced driver assistance systems.
Many new cars, not just electric vehicles, feature technology that makes them more expensive to insure and repair. Advanced driver assistance systems-ADAS often include multiple sensors and cameras and are vulnerable to even minor collision damage.
- Tesla electric vehicles are the most popular, but also the most expensive to insure in the United States.
While electric vehicles tend to have higher insurance costs, data from Insurify shows that Tesla electric vehicles top the list. The Tesla Model X, a luxury SUV with falcon wing doors, is Tesla's most expensive model and also has the highest average insurance cost, according to Insurify data.
A 2025 Tesla Model 3 costs about half as much as a 2025 Tesla Model X. However, Insurify data shows that it is still the second most expensive electric vehicle to insure. While its battery has a slightly lower range and between half and three-quarters of the capacity of the Model X, its technology is still expensive to repair.
Claims data can also shed light on insurance costs. The average claims frequency for a repairable electric vehicle with collision damage was 3.12% during the first quarter of 2025, according to automotive analytics firm Mitchell. However, the claim frequency for the Tesla Model 3 is 26.95%, indicating to insurers that these models require frequent repairs. The claim frequency for the Tesla Model X is 3.68%, considerably closer to the average.
According to data from Insurify, the Tesla Model Y and Model S are the next most expensive electric vehicles to insure. The Model S is much more expensive than the Model Y. However, the Model Y has a claim frequency of 29.47%, compared to the Model S's 5.22%, according to Mitchell.
Insurify data shows that, on average, insurance for these electric vehicles is 26% more expensive than for comparable vehicle makes and models.
- Geographic area.
The geographic area influences the price of insurance. In the United States, there are significant differences in insurance prices between states.
Severe weather, vandalism, and theft affect premiums for all vehicles. When vehicles are more expensive to repair or replace, insurance costs tend to increase to offset that risk. Insurance rates between states reflect this, some states have higher rates of vehicle theft, while others are prone to hail, hurricanes, or wildfires.
- Electric vehicle adoption rates.
Adoption rates also affect electric vehicle insurance costs. Fewer electric vehicles in an area means less information about the cost of claims. To protect themselves, insurers estimate that costs will be high and set premiums accordingly.
- In Spain, this ‘extra’ cost or price is cheaper.
However, although insurance for an electric car is more expensive in Spain than for an equivalent combustion engine car, the price difference is not so pronounced.
It should be noted that the cost of insurance for an electric vehicle in Spain is not exactly affordable. It is certainly more affordable than in the United States. According to a study carried out by the Organization of Consumers and Users (OCU), the difference in the cost of insuring an electric vehicle compared to a combustion engine vehicle can be as high as 17%.
To provide real data for its analysis, the organization compared a total of 23 policies for three different cars, always with a 30-year-old man with more than 10 years of driving experience and no previous accidents as a driver.
The vehicles in question are a Seat Leon XS with a gasoline engine, a Hyundai Ioniq non-plug-in hybrid, and a Citroën ë-C4 Feel pure electric. Of all the models, the most expensive is the electric one.
After receiving quotes from each insurer for each of the three vehicles, the OCU has revealed significant discrepancies, which can reach differences of between 400 dollars and 1,700 dollars for the same vehicle and driver. In this regard, the organization strongly recommends comparing prices.
According to the study carried out by the OCU, comprehensive insurance for a plug-in hybrid vehicle costs 15% more than for a similar car with an internal combustion engine. For an electric car, this additional cost is 17%.
- Implications for fleet management.
The main consequence of electrifying the fleet is that insurance for electric vehicles is higher than for internal combustion engine vehicles.
It is recommended to request quotes from at least three insurance companies for the entire fleet and to ask them to provide information on the maximum indemnifiable value of the insured cars, because the price differences for a comprehensive insurance policy for the same car vary between 400 dollars and 1,700 dollars depending on the insurer in Spain.
Some insurance companies already offer specialized rates for electric vehicles.
In a fleet of vehicles, the incorporation of ADAS systems should reduce the insurance premium, because there is less risk or fewer accidents.
It is necessary to find insurers that lower the insurance premium for the use of ADAS systems, or ADAS systems that lower the insurance premium, and incorporate them into the vehicles.
In the United States, there are vehicle brands such as Tesla where the insurance price is higher than other vehicle brands, and this is something to consider when purchasing a vehicle.
Also in the United States, the price of insurance is higher depending on the state.
One option for lowering the price of insurance is to save with telematic or usage-based insurance policies, which link premiums to driving data from a GPS device or smartphone app.
Reducing certain coverages, taking advantage of discounts, and maintaining a good incident report history can also help reduce insurance costs.
As the cost of electric vehicle batteries decreases, reducing the cost of repairs and replacements, insurance premiums may also go down.
Greater adoption of electric vehicles in a country increases data, improves risk models, and expands repair networks, which will ultimately reduce insurance premiums.
Slide 3. Thank you for your time.
The class has developed the price of insurance for electric vehicles and its implications for fleet management, see you soon.
Download the audio
