HomeCar InsuranceInsuring an EV? Make Sure to Consider These Factors

Insuring an EV? Make Sure to Consider These Factors

Protecting your electric car may mean changes to your home insurance as well—sometimes for the better

Insuring an EV? Make Sure to Consider These Factors

Drivers shopping for an electric vehicle are learning that they need to take more insurance questions into account than they might with a gas-powered car.

EV charging and its requisite wiring upgrades could affect homeowners insurance. Insurance experts say clients often ask whether storing a giant lithium-ion battery in the garage poses a fire risk.

The good news: Data suggests electric vehicles aren’t more dangerous to drive or park in your driveway than their internal combustion counterparts, according to the nonprofit Insurance Information Institute and Insurance Institute for Highway Safety. The bad: Your new EV will likely be more expensive to insure.

Here’s what to know if you’re making the switch to electric, according to insurance experts.

How much will my car insurance go up?

The average cost to insure a conventional internal combustion engine vehicle in the U.S. is $193 a month, according to insurance comparison website Insurify. It costs $230 a month on average to insure a hybrid vehicle and $317 for an all-electric vehicle, meaning EV owners can pay up to 64% more for coverage.

Why is insuring an EV so much more expensive?

Insurers look at several factors to calculate your rate, including your driving record, credit score, age and gender. None of these factors change when you switch to an EV, says Janet Ruiz, spokeswoman for the Insurance Information Institute.

What does change, Ms. Ruiz says, is the cost of parts and labor if your insurer must pay to fix or replace the car after a collision.

As electric vehicles have become more popular, they have gotten less expensive to repair. “Now that electric cars have been out for a while, the gap between insuring them and standard cars is lessening,” Ms. Ruiz says.

But recent supply-chain snarls and labor shortages have complicated the calculation, driving insurance prices up across the board.

Will my home-insurance premium increase if I install an EV charging station? 

Probably not. If anything, your premium might actually go down.

Most home insurers don’t look at electricity usage when calculating the price to insure your home, says Greg Pannhausen, who runs home-insurance coverage for Farmers. And if you upgrade your electrical system to handle charging your new EV, he says you could see your rates decrease. Homeowners with older houses who have failed to upgrade their wiring, he adds, can be penalized.

Will my home be protected if my electric vehicle catches fire in my garage? 

Standard home insurance covers most house fires, Ms. Ruiz says. But you shouldn’t worry too much about storing an EV. “I don’t see any increased fire risk with an electric vehicle,” she says.

Fully electric vehicles pose less of a fire risk than hybrids and gas cars, according to 2021 data from the National Transportation Safety Board compiled by insurance-comparison site AutoinsuranceEZ. There were 25 EV fires per 100,000 sales, compared with 3,475 hybrid fires and 1,530 internal-combustion engine fires per 100,000 sales, respectively.

Will my home insurance go up if I install solar panels? 

If you install solar panels that add considerable value to your home to supply energy to your EV, you could see your premiums increase marginally.

“Those roofs become extremely expensive, which can drive the premium a bit,” says Mr. Pannhausen. That said, he adds, it should be a very small percentage of your annual rate.

How can I make sure my property is as protected as possible? 

Don’t try to take any EV charging rewiring into your hands, Mr. Pannhausen says.

“Make sure you get the contractor, the electrician out there, because you never know when something could go awry and you never want to lose something to a fire that could have easily been prevented,” he says.

Source: https://www.wsj.com/articles/ev-electric-car-insurance-homeowner-11646422224

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