The Gap Between Insurance Rates for Electric and Gas-Powered Vehicles is Closing in the U.S.

• EVs still are significantly more expensive to insure than gas-powered cars on average, but the gap is closing.

• Lower battery costs and higher EV adoption rates are part of the reason.

• Adding technology to combustion-powered cars also increases their premiums towards those of EVs.

While it is still more expensive to insure an electric vehicle than a comparable gas-powered model, the gap is closing in the United States.

Indeed, a report from Insurify, cited by Automotive News, shows that the average price to insure an electric vehicle has reduced between 2025 and 2026, while premiums for gasoline-powered models have increased.

In fact, the average cost to insure an electric vehicle in the United States in 2026 is $3,159,42, which is 42% more than it costs to insure a gas-powered model. While this still seems like a significant difference, EV insurance costs have fallen faster than those for combustion-powered vehicles, which are also lower this year than in 2025.

There are many factors that can explain this, chief among which is the lower cost of lithium-ion batteries, which make up the bulk of the expected repair costs in case of an accident with an electric vehicle.

In addition, fairly high EV adoption rates over the last few years has led to greater availability of repair parts and the multiplication of EV-certified service centers across the country, further reducing repair costs and thus insurance rates.

This can be seen by the fact that insuring an EV in a rural area is more expensive than in a large city, since fewer garages will work on electric vehicles there, making waiting lists longer and pushing repair prices up.

Let’s not forget that price parity is rarely achieved solely through price reductions; however, as the cost to insure combustion-powered vehicles has also risen recently.

Indeed, the large gap between insurance premiums for EVs and combustion-powered vehicles can also be explained by the fact that on average, electric vehicles on the road are much newer than gasoline-powered models, which are currently aged 11,5 years in the United States.

In addition to having cheaper and more widely available parts, older vehicles also feature fewer technologies such as backup cameras and parking sensors, which cost more to repair than a plain bumper or trunk lid.

This explains why the gap between insurance premiums for EVs and combustion-powered vehicles is only 18% when looking exclusively at vehicles from the 2024 model year or newer.

The Insurify report also ranks electric vehicles from most to least expensive to insure, on average.

Unsurprisingly, the top of the list is dominated by high-end luxury EVs, such as the Mercedes-Benz EQS sedan ($4,703), the Tesla Model S ($4,558), and the BMW i5 ($4,554).

All five of Tesla’s current models are included in the top 10, but the Cybertruck is among the brand’s cheapest to insure models despite a higher incident rate. Julia Taliesin, author of the Insurify report, said to Automotive News that this could be due to the electric pickup’s customers having a higher credit rating due to its higher price.

At the other end of the spectrum, the cheapest EVs to insure are the Chevrolet Equinox EV ($2,512), the Volvo EC40 ($2,451), and the Ford E-Transit ($2,285).

While insurance prices are coming down for all types of vehicles, buyers should still get a few quotes before choosing an electric vehicle for the first time in order to avoid a nasty surprise.

Source: Automotive News