Electric vehicle owners pay, on average, $3,159 per year for insurance, which is $941 more than drivers of gas-powered vehicles. In studying 235 million insurance quotes, Insurify found EVs were 42% more expensive to insure.
Driving the news: Interest in EVs has rebounded as gas prices have increased since late February and the start of the conflict in the Middle East. Gas prices topped $4.50 per gallon in May.
Cox Automotive recorded 76,889 new EV sales in April, a 6.2% increase from March.
Sales of EVs were down year-over-year with the expiration of the clean vehicle credit of up to $7,500 in September 2025.
Used EV sales in April totaled 42,080, up 16.7% year-over-year.
Higher prices influence insurance costs: EVs remain more expensive than ICE models. Cox Automotive noted in April the average transaction price for EVs was $55,211, $6,214 more than ICE models’ price of $48,997.
Used EV models had an average price of $35,895 compared to $34,799 for gas-powered vehicles.
That price difference is attributed to the difference in insurance costs, according to Julia Taliesin, Insurify economic analyst and licensed insurance agent.
“In a total loss claim, the insurer typically covers the vehicle’s depreciated value, unless the driver has gap insurance, for example.”
Other factors leading to costs: It’s not just the initial price that leads to an increased premium. The parts are also more expensive, with batteries ranging from $9,000 to $21,000.
“EV battery replacement from collision or comprehensive claims can drive up rates,” Taliesin said. “Inflation and the availability of certified EV mechanics can also influence costs.”
Variance by model, location: Insurify noted the most expensive EVs to insure were the Mercedes-Benz EQS, Tesla Model S, and BMW i5. Five Tesla models were among the top 10 most expensive.
Not to mention, the costs in different states varied.
Massachusetts EV owners, for one, paid 54% more for insurance on EVs than gas-powered vehicles, and New Yorkers 45% more.
Meanwhile, Montana, West Virginia, and Nebraska EV drivers actually paid less for insurance than their ICE counterparts.
Newer models see smaller gap: When looking at premiums between EV and ICE vehicles for 2024 and newer models, Insurify noted the gap actually closed to 18% or $501.
“The cost gap between insuring EVs and gas-powered vehicles may continue to shrink as battery prices fall and advanced tech becomes standard across all new vehicles,” Taliesin said.
Overall, insurance rates fell 6% last year, and Insurify expects rates to go up by 1% in 2026.
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Takeaway for dealers: As car shoppers are weighing options, the insurance conversation and costs are worth mentioning. It is an important component in the overall costs along with gas, maintenance and registration.
“I’d say don't hide the cost of EV insurance. Raise it during the test-drive or in early sales conversations as part of the full cost of EV ownership,” Taliesin said. “Advise customers to shop online before finalizing a deal to eliminate surprises and position yourself as an adviser, not just a salesperson.”
“For example, if a customer already has a newer vehicle, they may not see a huge jump in their premiums when switching to an EV. Also, knowing which EVs are cheaper to insure can help you direct customers to an EV that fits their budget.”
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