What the US car insurance industry really thinks about EVs – and how to get the best policy
This is what the US car insurance industry really thinks about EVs, how it affects your premium, and how to choose an insurance company for your EV that really will have your back if you need help.
Can insurance companies embrace change?
A recent white paper by the University of Illinois Urbana-Champaign and Argo Group, an underwriter of specialty insurance products, asserted that EV and energy storage battery factories offer a great opportunity for insurers. That’s because battery-making facilities “tend to be well-funded, low-risk enterprises with plenty of loss data to analyze.”
The white paper’s recommendations for insurers are also applicable in the EV insurance sector. It suggested that insurance companies refine their ranking systems used to determine favorability; ask for and engage with feedback from customers on what insurance products they need the most; and continue to model and compile new loss data across emerging industries.
And because EVs are rapidly being adopted in the US market, insurers need to also rapidly adopt change. Alex Hindson, the group chief risk & sustainability officer at Argo Group, said to Electrek:
Insurance is an industry that has a problem with innovation. It’s all based on data and appetite for risk. So if insurance companies don’t understand something, they’re cautious.”
Gas cars vs. EVs
Electrek also spoke with a former claims director of a top five insurance company who asked to not be identified, so we’ll call him John Smith. He explained the current state of the US car insurance industry for context:
The US car insurance industry is hurting right now – losing a lot of money – because of COVID, because that’s when car production stopped. It’s difficult to obtain parts for vehicles due to supply chain issues. There’s also a chip shortage for new cars. So what that’s doing is raising the used car market prices by about 40%.
If you have an accident in a used car, it costs the insurance company 30-40% more to repair it due to the cost of parts and labor.
Insurance companies are trying to raise their rates to be profitable, and they’re throwing electric vehicles into this because they’re currently taking a bath. They actually don’t want to write new policies because they’re losing money.
And Hindson explained why some car insurance companies don’t offer competitive premiums for EVs:
If an insurance company offers high premium for electric vehicles, it’s for one of two reasons: They either don’t know what they’re doing and price high for uncertainty, or they do know what they’re doing and don’t want to do it.”
In other words, car insurance companies exercise caution if they don’t understand something.
Gas cars often have lower insurance rates, and it’s not because they’re safer. It’s because there’s an enormous amount of data on gas cars that insurance companies can tap into. They’re a known quantity.
But some insurers have decided they want to pursue the emerging EV market, so they’re gathering their own data. So if their prices are more competitive, it may be because they’re building more of the market share.
Neither Hindson nor Smith cited EV fires as a risk factor for insurance companies. Hindson also noted that if an EV gets into an accident, it’s more likely to be declared totaled due to the weight and expense of the battery.
How to get the best car insurance policy for EVs
Some insurance companies are trying to partner with EV companies, and specifically with Tesla, because EV makers have the background knowledge and data they seek.
Teslas need to be repaired by certified Tesla locations, so it takes a lot longer to do the repairs because they’re backed up. When it comes to non-Tesla EVs, many dealers require you to come to their facilities.
The average length of a car rental when your car is being repaired, Smith explained, is between 12-15 days. For Tesla drivers, it averages about 20-25 days. So it costs the insurance company about $36 per day on average for a rental car.
So the cost of premiums has more to do with repair bottleneck and the limited number of facilities to do the repairs than the car’s safety rating.
Smith shared the best way for EV owners to get a reasonable premium and good coverage:
Shop around, because so many insurance companies have a better EV book than others. Progressive and Allstate, for example, are good at using technology to understand data – they put something in your car to better understand your driving habits, and that brings down the premium. [Editor’s note: Smith did not work for Progressive or Allstate.]
Choose a company who wants to embrace and better understand electric vehicles.
When you’re shopping around, ask the insurance company, “Are you partnered with electric vehicle repair facilities?” If they’re not, move on to the next company. In the long haul, it will so much easier to repair if you have an accident.
Hindson also echoed this sentiment, advising that drivers seek insurance companies that use telematics, because car insurance companies love data. And data will eventually help them catch up.
Hindson said:
[The insurance industry] can’t do well by excluding things. We can’t win by playing defense. The problem will solve itself with time.”
Smith echoed this sentiment:
Driving an EV has so many positives. The world just needs to catch up.”
Photo: Tesla
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Compton, California, has unveiled 25 new electric school buses – the school district’s first – and 25 Tellus 180 kW DC fast chargers.
Compton Unified School District (CUSD) in southern Los Angeles County is putting 17 Thomas Built Type A and eight Thomas Built Type C electric school buses on the road this spring. In addition to working with Thomas Built, CUSD also collaborated with electrification-as-a-service provider Highland Electric Fleet, utility Southern California Edison, and school transportation provider Durham School Services.
Environmental Protection Agency’s (EPA) Clean School Bus Program awarded funds for the vehicles in the program’s first round. EPA also awarded CUSD funds for the third round of the program and anticipates introducing an additional 25 EV school buses in the future.
“I can’t stress enough how vital grants like these are and the need for continued support from our partners in government at the state and federal level to fund additional grants for school districts and their transportation partners that are ready to deliver and operate zero-emission buses,” said Tim Wertner, CEO of Durham School Services.
CUSD, which serves Compton and parts of the cities of Carson and Los Angeles, currently serves more than 17,000 students at 36 sites. The district has a high school graduation rate of 93% and an 88% college acceptance rate. One in 11 children in Los Angeles County have asthma, which makes the need for emissions-free school transportation that much more pressing.
Read more: Thomas Built Buses debuts its next-gen electric school bus
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After cutting lease prices by $200 this month, the Rivian R1S is now surprisingly affordable. It may even be a better deal than the new Tesla Model Y.
Rivian cuts R1S lease prices by $200 per month
Rivian’s R1S is one of the hottest electric SUVs on the market. If you haven’t checked it out yet, you’re missing out.
With some of the best deals to date, now may be the time. Rivian lowered R1S lease prices earlier this month to just $599 for 36 months, with $8,493 due at signing (30,000 miles). The offer is for the new 2025 R1S Adventure Dual Standard, which starts at $75,900.
Before the price cut, the R1S was listed at $799 per month, with $8,694 due at signing. The electric SUV now has the same lease price as the R1T, despite costing $6,000 more.
The 2025 R1T Dual Motor starts at $69,900, essentially making it a free $6,000 upgrade. At that price, you may even want to consider it over the new Tesla Model Y.
Tesla’s new Model Y Launch Series arrived with lease prices of $699 for 36 months. With $4,393 due at signing, the effective rate is $821 per month, or just $13 less than the R1S at $834. However, the 2025 R1S costs nearly $15,000 more, with the Model Y Launch Series price at $59,990.
Rivian is also offering an “All-Electric Upgrade Offer” of up to $6,000 for those looking to trade-in their gas-powered car, but base models are not included.
| Starting Price | Range (EPA-est.) |
|
| 2025 Rivian R1S Dual Standard | $75,900 | 270 miles |
| 2026 Tesla Model Y Launch Series | $59,990 | 327 miles |
To take advantage of the Rivian R1S lease deal, you must order it before March 15 and take delivery on or before March 31, 2025.
The 2025 Rivian R1S Dual Standard Motor has an EPA-estimated range of up to 270 miles. Tesla’s new Model Y Launch Series gets up to 327 miles.
Which electric SUV would you choose? Rivian’s R1S or the new Tesla Model Y? If you’re ready to check them out for yourself, you can use our links below to find deals on the Rivian R1S and Tesla Model Y in your area.
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Tesla says it can deliver new orders for the refreshed Model Y within two weeks in China. Is the automaker already experiencing a demand problem with the new Model Y?
Last month, Tesla launched the new Model Y in China. The vehicle features an updated design and new features that bring it closer to the recently refreshed Model 3.
Tesla has now started delivering the Long Range AWD updated Model Y in China this week.
But along with the start of deliveries, Tesla also opened orders for the non-Launch edition and the Standard Range RWD:
There were rumors coming from China that Tesla managed to get hundreds of thousands of orders for the new Model Y, which is not impossible since it would be just a few months of production for the best-selling EVs, but now Tesla’s updated configurator raised questions about these rumors.
Tesla says it can deliver a new Model Y RWD order placed today in “2 to 4 weeks” in China.
The Long Range AWD Model Y takes a bit longer at “6-10 weeks” for new orders.
Based on insurance data, Tesla’s deliveries in 2025 are currently down about 7,000 units compared to the same period last year.
Electrek’s Take
There’s no doubt that the Model Y changeover is going to hurt Tesla in Q1. The question is, by how much?
I am surprised to see that you can place an order right now and get on in just 2-4 weeks. It does point to soft demand for the RWD version, at least.
It’s going to be interesting to track deliveries through March. Tesla will need to deliver over 50,000 vehicles next month to arrive at similar levels as it did last year.
It looks like the production ramp is going well, so demand might be the bigger factor.
As for the Model 3, Tesla is already pulling all the demand levers in order for the sedan to contribute, but everything points to the new Model Y being the different maker.
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