Will Electric Vehicle Insurance be More Expensive?

Many car enthusiasts are calling 2011, “The Year of the Electric Vehicle”. While some balked at the popularity of these new cars – the newly released Nissan Leaf and Chevy Volt are generating lots of excitement and in the coming months, even more Electric Vehicles (EVs) will be unveiled.

The electric vehicle runs on a battery that can be recharged, just by plugging the car into an approved charging station. Carmakers have promised that EVs will reduce pollution, as well as, our dependence on gas and oil. However, will electric vehicle insurance be more expensive than for other traditional automobiles?

James Bell, executive market analyst for the Kelley Blue Book says that there are several good reasons why insurance premiums for EVs will carry a lower price.

Reason #1 – Similar to Hybrids (and Hybrid Drivers)

One major reason why EVs will have cheaper insurance costs is because of initial similarities between new EVs and the first hybrid vehicles. When hybrids were first released, they weren’t flashy or sporty cars by any means, therefore, hybrids (and now, electric vehicles) were typically, considered less risky to insurance than most other vehicles. In addition, hybrid and EV drivers are considered the opposite of reckless, risk-taking motorists who typically, have higher insurance.

With the exception of the limited edition, Tesla, the newest generation of EVs is very much the same, as the forerunner hybrids. Electric vehicles are expected to attract the same conservative, stable, safe drivers as the hybrid vehicles.

Reason #2 – Limited Range

The newest EVs are likely to be driven particularly in-town for running errands or within a limited range for commuting. The range limitations and lack of options for charging EV batteries in a public setting means that these vehicles will not be taken on long trips. Due to the limited range in most EVs, these vehicles face a lowered risk of accident exposure. The fact that these vehicles will be used, only conservatively simply means — cheaper insurance for electric vehicle owners.

Reason #3 – Cheap/Simple Repairs

While EVs are considered “new technology”, the mechanics are based on a simple concept that is over a century old. EVs have few moving parts, therefore, as far as the reliability of the vehicle – EVs are not considered a risk. Electric Vehicle technology is the same technology that is often, seen in golf carts. The simplicity of this technology and the lack of moving parts in EVs typically, means these cars are typically cheaper to repair and much simpler than traditional fuel-powered vehicles, which leads to lowered claims expense to insurance providers.

The combination of these factors — safer to drive and safer drivers, fewer mileages and the fact that EVs are cheaper and easier to repair — suggests that Electric Vehicles will have lower car insurance rates than traditional gas-fueled vehicles. Therefore, EVs are not only friendly to the environment and cheaper, in terms of daily maintenance (NO or little gas required) — but they can also be considerably cheaper than other vehicles — to insure.

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