CoverHound Insurance has released a newly completed study that shows electric vehicles (EVs) are cheaper to insure than gas powered vehicles. The study shows on average drivers of EVs save around $200 on insurance when they make the upgrade from gas to electric.
CoverHound is a predominantly web-based insurance company that was founded in 2010 and is based in San Francisco, California. The study came about from CoverHound after the company had sold upward of 20,000 policies and noticed a trend among those who drove EVs in place of traditional gas-powered cars. For example, the company noticed that when a driver switched from a Cadillac CTS for a Chevy Volt that driver could potentially save a whopping $600 a year, even though the two cars have a starting MSRP within $5,000 of each other. A driver going from a Nissan Maxima to a Nissan Leaf could save $300 a year, even though the cars are comparably priced before factoring in the Federal tax credit. On average, drivers switching from gas to electric vehicles save about $200 a year. Not bad.
Further savings are had when looking at the cost of gassing up a car next to the cost of charging an EV. Of course there are many variables here, distance driven and such, but on average data shows that filling up a gas powered Toyota Corolla for a year would cost on average $1,830. Charging up an electric Nissan Leaf would only cost about $330. Overall, cheaper fuel costs coupled with lower insurance cost helps offset some of the often high sticker price of many EVs.
In years past there has been confusion and concern that some insurance companies would not even insure EVs. However, as EVs have become mainstream modes of transportation, companies are adopting their policies to cover this new type of transportation technology.
But why are EVs cheaper to insure? Well much of auto insurance is still based on the driver and the type of car. So if you have a bad driving history and you’re buying a Tesla don’t expect to save all that much. What it really boils down to is that the majority of EVs on the roads are compact and less powerful vehicles than their gas powered cousins – and from an insurance standpoint this equates to a safer vehicle and thus less money to insure. In terms of actual crash test ratings, the Chevy Volt was rated higher than the Nissan LEAF, but the Tesla Model S is so structurally strong that it actually broke the IIHS testing equipment, receiving a full five-star rating (and then some).
Source: The LA Times | Image: NHTSA