Can You Get an Insurance Discount for Owning an Electric Car?
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Written byJ.J. Starr
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J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
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Edited byMatthew Gross
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Matthew Gross is an insurance editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
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Table of contents
An electric vehicle (EV) discount — sometimes called a hybrid or alternative fuel vehicle discount — rewards drivers of eco-friendly cars with lower insurance premiums. That’s especially valuable because electric vehicles don’t usually get cheap car insurance.
Insurance premiums for EVs cost up to $44 more per month than gas-powered vehicles, according to the National Association of Insurance Commissioners (NAIC). Our data shows that Tesla Model 3, Model S, and Model Y drivers pay the highest average prices for insurance coverage.
But as more drivers choose alternative fuel vehicles, those higher rates should fall. Until then, it’s worth considering insurance companies that offer discounts for electric or hybrid vehicles.
The discount isn’t typical, but you could save 5% or more. Let’s get into the details.
Do Insurance Companies Give Discounts for Electric Cars?
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Only four insurance companies state that they provide discounts on electric car insurance, hybrid cars, and alternative fuel vehicles, according to our research. Discounts vary by state, so you’ll need to get a quote or speak to an agent to find out more.
Most companies don’t advertise the discount’s value. AAA advertises the largest discount, at 5%, but it excludes California. Other insurers don’t say how much they reward drivers for owning alternative fuel vehicles.
EVs also qualify for other car insurance discounts, like multi-vehicle and car safety features.
How to Get an Electric Car Insurance Discount
To qualify for an electric car insurance discount, you typically must own or lease a fully electric or plug-in hybrid vehicle. Your insurer will typically apply the discount automatically when you provide your vehicle information. But it’s worth double-checking your quote to make sure it includes the discount.
Most insurers offer discounts for all alternative fuel vehicles. But Lemonade offers a discount only for hybrid vehicles. That said, other insurance companies may offer an EV or related discount without advertising it. Regardless, the best way to find your lowest rate is to use a car insurance comparison site.
If you drive an alternative fuel vehicle, check your current policy to see if you already have a discount.
Where to Get an Electric Car Insurance Discount
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Here are the best car insurance companies we found that advertise discounts for alternative fuel vehicles:
AAA offers a 5% discount for hybrid and alternative fuel cars.
Travelers offers a discount on hybrid and electric insurance but doesn’t specify the amount.
Mercury Insurance doesn’t share the amount of its discount but says it’s available to all EVs.
Lemonade offers discounts for hybrid cars but doesn’t state the amount.
Discount options vary by state, so get a quote or speak with an agent to verify availability.
The Best Electric Car Insurance Companies
Finding auto insurance discounts for electric vehicles can help offset their higher premiums. AAA, Travelers, and Mercury are the top three insurers offering discounts for electric or hybrid vehicles, based on our research. Each company provides unique benefits, from membership perks with AAA to budget-friendly rates with Mercury.
Below, we explain why these companies provide the best auto insurance for EV discounts and how those discounts compare.
American Automobile Association (AAA)
Advertised discount amount: Up to 5%
Average premium: $314 per month
Compare.com Rating: 4.28 out of 5
Drivers with hybrid or alternative fuel vehicles can save 5% with AAA, unless you live in California. Different AAA regions have their own discount programs, so check with your local AAA club to see what’s available.
As an AAA member, you can access many car insurance discounts and membership perks, including roadside assistance, travel benefits, and DMV services.
Travelers
Advertised discount amount: Not advertised
Average premium: $128 per month
Compare.com Rating: 4.57 out of 5
Travelers offers a discount for owning or leasing a hybrid or electric vehicle, but the company doesn’t specify the specific amount. The company also offers multi-car and new-car discounts and Intellidrive, its telematics program.
Mercury
Advertised discount amount: Not advertised
Average premium: $119 per month
Compare.com Rating: 3.6 out of 5
Mercury Insurance applies its electric vehicle discount to all EVs on a policy, and you can combine it with other vehicle-based discounts like anti-lock brakes, airbags, and daytime running lights.
Other Ways Owning an Electric Car Affects Insurance Rates
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While electric cars offer tax incentives and long-term savings in fuel and maintenance, they have higher average insurance rates than gas cars.
EVs also have higher replacement costs, a scarcity of repair shops, specialized repair needs, and pricey battery replacements — EV batteries can account for half the vehicle’s value. Electric vehicle owners have fewer insurance claims but at higher costs per claim, according to the Highway Loss Data Institute.
Some EV owners drive fewer miles — especially those with short-range vehicles. Insurers usually offer lower rates to people who drive less and may also award a low-mileage discount. But EVs are often more expensive cars, which means most owners opt for comprehensive and collision coverage.
Other Common Car Insurance Discounts
Car insurance discounts can significantly reduce premiums, especially when combined. Some discounts reward eco-friendly choices, vehicle features, or responsible driving. EV owners should consider the full range of car insurance discounts.
Here are some common ones and what you can expect to save:
Low-mileage discount: Drive fewer miles annually — usually around 7,500 miles — to qualify for reduced car insurance rates.
Safe driver discount: Drivers who maintain a clean driving record can save up to 30%.
Pay-in-full discount: Pay your annual premium up front for 5% to 10% in savings.
Paperless discount: Opt for electronic statements to receive a discount of up to 5%.
Vehicle safety features: You can save up to 23% if your car has features like airbags, blind-spot detectors, and electronic stability control.
Multi-policy discount: Bundling your other insurance with your auto policy can get you a multi-policy discount of up to 25%.
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Electric Car Insurance Discount FAQs
Auto insurance for electric cars is rapidly changing as they become more widely adopted. Below are answers to common questions about EV car insurance.
Is car insurance cheaper for electric cars?
No. The average cost of car insurance for electric vehicles is more expensive than for traditional gas-powered cars, according to our research. EV repair is more specialized and has higher associated costs. You should expect to pay a difference of around $44 more per month for electric car insurance, based on research from the NAIC.
Does insurance cover EV battery replacement?
It depends. Comprehensive and collision insurance policies typically cover damage to an EV’s battery from car accidents or theft. But they don’t cover battery degradation due to normal wear and tear. Review your policy details for coverage specifics.
Does GEICO insure electric cars?
Yes. GEICO provides insurance coverage for electric vehicles. Though GEICO doesn’t advertise discounts for EVs or hybrids, average insurance costs are low — GEICO is one of the most affordable companies in the insurance industry, according to our data.
What discounts can you get on an electric car?
Multi-policy, car safety features, and low-mileage discounts are often available to EV drivers. While not every insurer offers discounts for electric vehicles, some provide incentives for eco-friendly choices like going paperless.
Sources
National Association of Insurance Commissioners, “Electric Vehicle Insurance Rates,” accessed November 21, 2024.
Highway Loss Data Institute, “Insurance losses of electric vehicles and their conventional counterparts while adjusting for mileage,” accessed November 21, 2024.
Reuters, “Insight: Scratched EV battery? Your insurer may have to junk the whole car,” accessed November 21, 2024.
Climate Portal MIT, “How Much Are Electric Vehicles Driven? Depends on the EV,” accessed November 21, 2024.
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J.J. StarrInsurance Writer
J.J. Starr is an insurance and personal finance expert who has been writing for Compare.com since 2022. Her work has been published across the web, appearing on sites such as Insurify.
Prior to writing for Compare.com, J.J. was a registered banker and life insurance consultant, holding a Series 6, FINRA, and life insurance license. She also earned a master’s degree in writing from New York University.
J.J. has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand.
Matthew Gross is an insurance editor at Compare.com. With a background in editing and SEO, he’s passionate about creating content that helps readers get the information they need to make more informed decisions. Prior to Compare.com, Matthew brought his user-centered approach to his work with global brands like Apple and Adobe.
Matthew graduated from Illinois State University, where he earned his bachelor’s degree in Journalism.
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