California could be at the forefront of these car insurance savings because it is one of the earliest adopters of clean cars (including Hybrids, Plug Ins & electric cars) in the nation.
California Electric Car Owners Can Get Cheaper Car Insurance
Contributed by | Nolpeg Research Team
Most people hesitate to buy cleaner electric vehicle cars because the total cost of ownership is far more expensive than regular gasoline cars even after including for lower fuel costs. However, the scales may be tipping in favor of Electric cars especially in terms of car insurance costs. Nolpeg’s research has shown that electric car owners could save about 5-10%, depending on your car insurance provider.
For example, Hartford announced last year that it would offer a 5% discount to EV owners and the reason they gave for the discount was because of environmental sustainability. However, experts like David Cole, the chairman emeritus of the Center for Automotive Research, believe it is because it is a smart financial bet.
From a consumer car insurance savings perspective, Nolpeg performed an analysis for four California cities - Los Angeles , San Diego Sacramento & San Jose & found car insurance savings of approximately $200, $130, $165 and $130 respectively.
However, not all insurance rates are alike. For example, your insurance premium could go up because you traded in your old Chevy gasoline car worth $5000 for a new Nissan Leaf worth $35,000. Since the new electric car is worth 7 times more than the old gasoline car, the insurance company has to account for the risk for insuring a much more expensive car. Therefore, its best to evaluate your own personal situation and compare multiple offers even if it is for the same car to see which company offers the best quote.
However, regardless of the individual scenario, the macro trend is evolving to lower insurance costs for electric cars. The savings could become even more as electric cars become more popular. For example, if you take an electric car into a repair shop today, your costs are likely to be more simply because the mechanic is unfamiliar with an electric car. As electric cars gain popularity, the expertise and the resulting repair costs reduce. This will in turn reduce car insurance costs.
California could be at the forefront of these car insurance savings because it is one of the earliest adopters of clean cars (including Hybrids, Plug Ins & electric cars) in the nation. The below chart shows the Monthly US sales (blue bars) along with the US Cumulative Sales (red line). California accounted for a third of the nation’s clean cars (Green line).
Therefore, as network effects kick in of more & more electric cars, your insurance & total cost of ownership could further reduce.
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