With the increased demand for electric cars, due to environmental concerns and the rise in gas prices, there are many factors to consider when it comes to insuring the car and how it affects your homeowners' coverage.
A recent Wall Street Journal article reported on the risk involved with an electric car and the cost of insurance for both the car and the home. The Journal says that data from the Insurance Information Institute and the Insurance Institute for Highway Safety suggests that electric vehicles are not any more dangerous to drive or park in your driveway than a vehicle with internal combustion. According to data from the National Transportation Safety Board, complied by AutoinsuranceEZ, fully electric vehicles pose less risk of fire than hybrids and gas cars. There were 25 electric car fires per 100,000 sales, compared with 3,475 hybrid fires and 1,530 internal combustion engine fires per 100,000 sales.
Insurance Is Currently Higher For Electric Cars
Insurers look at several factors to calculate your auto rate, including your driving record, credit score, age, gender and other factors. But these factors don't change when you switch to an electric car. What does change is the cost of parts and labor that an insurer would have to pay to fix or replace your car after an accident. And with current supply chain issues, the lack of availability of chips and labor shortage, these prices have increased.
The average cost to insure a conventional internal combustion engine vehicle in the U.S. is $193 a month, according to insurance comparison website Insurify. It cost $230 a month on average to insure a hybrid and $317 for an all-electric vehicle. That's an increase of up to 64% more for coverage for an electric vehicle. As electric cars get more popular, these rates are likely to go down.
How Electric Cars Affect Homeowners' Insurance
The big question is will charging an electric vehicle at home and the use of a large lithium-ion battery pose fire risks in the garage. First of all, most insurers don't look at electricity use when calculating prices to insure your home. Secondly, in order to have a home charging station, your electrical system should be upgraded. This upgrade could actually result in a decrease in your homeowners' rate. If the wiring isn't upgraded, then an insurer could penalize the homeowner with higher rates.
If you are considering purchasing an electric car or any new vehicle for that matter, it is always good to discuss your insurance needs with your J.P. Perry agent before you start shopping.