Electric car insurance
If you're thinking about buying an electric car, consider your cover options and how to pay less for electric car insurance.
As more electric cars pop up on UK roads, you may be considering making the switch and driving one yourself. For the time being, you’ll be able to tax your electric car without paying a penny, and you won’t have to pay the London congestion charge.
Choosing to drive an electric car can be a “greener” step in the right direction but don’t be left out of pocket when insuring it. Read our guide to discover how electric car insurance differs from traditional cover, and how you could save on your premium.
What is electric car insurance?
This isn’t a trick question. Electric car insurance is, as the name suggests, insurance for electric cars. The more important question is: How is it different from regular car insurance?
Does car insurance for electric vehicles work differently?
In many ways it’s the same as for any other car. You don’t need a special type of insurance for an electric vehicle (EV); most mainstream insurers will happily offer you a quote for an electric car. And, just like regular car insurance, electric car insurance premiums are calculated based on a number of factors. The car’s value, age and performance, as well as the driver’s age, driving history and location, will all be considered.
But there can be subtle differences. EVs are still pretty new, so some insurers may be hesitant to offer cover for them, though this is rapidly changing as they become more popular. And, conversely, there are some specialist providers and policies that may offer features more tailored towards EVs.
Insurers may also give more consideration to certain factors for EVs than they do for petrol or diesel cars. For example, electric cars rely heavily on new technology, which may be more expensive to repair. The electric battery that powers EVs, in particular, can be pricey to replace.
While some factors have the potential to increase the cost of car insurance, electric cars are becoming more mainstream. By 2030, when the sale of new fully petrol and diesel cars will be banned, EVs will be a more common sight on UK roads. Increased ownership is likely to bring down the cost of parts and repairs, and it’s likely the cost of insurance will follow.
What level of cover can I get for my electric car?
You can get the same levels of cover for an electric car as are available with any other type of car. These are:
- Third-party insurance. This covers you for damage to other people’s cars and property if you cause an accident, but it won’t cover any damage to your car or injuries to you or your passengers. Third-party insurance is the minimum legal requirement to drive a car.
- Third-party, fire and theft. As well as damage to other people’s cars and property, third-party, fire and theft covers your own car if it is damaged by fire or stolen.
- Fully comprehensive. Covers both other people’s cars and property and your own in the event of damage in an accident, as well as protecting your car if it is stolen or fire-damaged. It’s the highest level of car insurance and, contrary to what you might expect, often isn’t more expensive than a third-party policy.
What extra policy features are available with electric car insurance?
Electric car insurance typically has all of the features you can get with a regular car insurance policy, either as standard or as add-ons, such as courtesy car cover or breakdown cover.
When you’re insuring an electric car, you should also make sure your policy includes:
- Electric battery cover for any damage done to or theft of your battery. Also bear in mind that with some EVs, particularly older models, you lease the battery on a separate contract from owning the vehicle. If this is the case, you’ll need to make sure the insurance company is aware.
- Cover for the portable charging cables. These are essential to recharge your car when you’re out and about, so make sure you’re covered in case they’re lost, stolen or damaged.
- Liability cover. You’ll need this in the event that someone trips over the charging cable while it’s in use, is injured and makes a claim against you.
How much does electric car insurance cost?
As with all cars, the cost of insurance for electric cars will vary depending on your personal circumstances. Very young drivers, for example, will usually pay more for their insurance regardless of the type of car, as industry data shows that they are more likely to make an insurance claim.
One key factor that affects the cost of insurance is the car insurance group that a car falls into. A car’s insurance group is heavily influenced by the purchase price of a new car, and the likely cost of repairs.
Electric cars are, on average, much more expensive than petrol or diesel cars to buy new, and their specialist technology means that repairs can be pricier too. These factors mean that electric cars are usually placed in higher insurance groups than petrol and diesel cars of a similar size and class range. Typically, the higher the insurance group, the higher the insurance premium.
For example, the fully-electric Renault Zoe is in insurance groups 14-22, depending on the specific model. The cheapest versions of the similarly-sized, traditionally-fuelled Renault Clio are in groups 3 or 4. Only the highest-end and often more powerful models in the Clio range are in groups 14 or above.
That said, early adopters of electric cars tend to have ethical values. Some sources suggest that this makes them safer, more conscientious, and lower-risk drivers. This could result in them being offered lower rates.
Do all insurance providers offer electric car insurance?
Most insurers will happily insure your electric car as part of their standard quote process, but some may not. If you’re switching to an electric car don’t assume your preferred insurer will definitely cover you.
This means you may need to put in a bit more effort shopping around, including checking specialist policies, to find a policy that’s right for you.
That said, electric car insurance is already far more widely available than it was when the electric car industry was in its infancy. As electric cars become more popular, it’s likely that electric car insurance will become more widely available and, potentially, cheaper.
How can I get cheaper electric car insurance?
- Choose a cover level that suits you. Contrary to what you might expect, comprehensive cover can be cheaper than third party (TP) or third party, fire and theft so it’s always worth checking. This is because of the risk profile of many people who typically get TP.
- Increase security. If your car is not currently fitted with an alarm, think about adding one to reduce your premium.
- Have a secure location to park your car. Cars kept in a garage or on a secure driveway are usually cheaper to insure.
- Limit your mileage. If you start working part-time or your long commute becomes much shorter, letting your insurer know about a reduction in your mileage could result in cheaper insurance.
- Increase excess. Agreeing to pay a higher voluntary excess could make your overall premium cheaper. But remember that your insurer won’t pay out for a claim that costs less than your excess. So be careful about making it too high, as it could leave you out of pocket if damage occurs.
- Add experienced drivers. Adding an older and more experienced driver to your policy lowers the risk and could help to lower the premium.
- Limit optional extras if you don’t need them. Think carefully about which optional extras you really want, as adding extra protection to your policy will generally push the price up too.
- Avoid paying monthly. If you can, try to pay for your premium in one go as you’ll pay interest if the premium is spread out over the year.
- Limit modifications. Any modifications made to your car to make it look better or drive faster are likely to increase your premium so think carefully before making any changes.
- Shop around. Don’t simply choose to renew your car insurance when it’s up for renewal as you could end up paying more than you need to. Shop around and compare your options to find the best deal. Keep in mind that the cheapest policy isn’t always the best policy, so check the cover details carefully.
What government grants can you get for an electric vehicle?
Electric cars are still a pretty recent innovation. Like any new technology, this means they are typically more expensive than their traditional equivalents.
However, because electric cars are better for the environment, the UK government is keen to encourage uptake.
Because of this, as of March 2021 the government is offering grants of up to £2,500 to buy an electric car. To be eligible, cars must have an RRP of less than £35,000 (including VAT and delivery fees). The grant will reduce the purchase price of a car by a maximum of 35%. The grant is automatically applied by traders when you buy an eligible electric vehicle; you don’t have to do anything to claim it. Find out more on the gov.uk website.
There is also a grant of up to £350 (with an extra grant on top of this if you live in Scotland) available to install electric car wall chargers at home, provided you install a “smart” charger.
What are the pros and cons of owning an electric vehicle?
- No road tax or congestion charges. Fully-electric, zero-emission cars are exempt from both.
- Better for the environment. Because they don’t produce any emissions, electric cars are much “greener” than cars that use petrol or diesel.
- Low running costs. Home electricity costs are lower than petrol or diesel, so if you’re able to install a home charger, you’ll pay less to power your car. Public EV charging costs can be much more expensive, though.
As electric cars grow in popularity, more and more insurers are offering electric car insurance. This includes both electric car insurance specialists and mainstream providers. There are factors that can make electric car insurance pricier than regular car insurance, such as higher up-front and repair costs. But there are many other things that affect the cost of car insurance too, for better or worse, and premiums for electric car insurance are becoming increasingly competitive. The same cost-cutting principles apply as when you’re insuring any car: safe driving habits, strong car security measures and, crucially, shopping around, can all help you secure cheaper car insurance.
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