ITS Researcher Sarah Catz Shared Her View About Cheap Car Insurance in California

The article featuring ITS Researcher Sarah Catz was originally posted on WalletHub.

How do you think increased adoption of electric vehicles will change the car insurance landscape?

According to a recent online report, car insurance premiums in 2023 rose an average of 26% nationwide. The largest increases were seen in New Jersey (45.69%), Missouri (44.16%) and Rhode Island (42.29%). Unfortunately, the increased adoption of electric vehicles will not have much impact on the car insurance landscape—at least for the near future.

Currently, electric car owners pay slightly more for automobile insurance than owners of cars that use fossil fuels. A reason for this could be that electrical vehicles tend to cost more than other vehicles, so the replacement value is higher. Additionally, if something were to happen to an electric vehicle battery in an insurable accident, a brand-new battery could cost as much as $15,000. Further, many of the parts in an electric vehicle are imported from overseas and could be more expensive to replace.

There is some good news for electric vehicle drivers, however - several insurance companies are now offering up to a 10% discount for drivers of a clean fuel vehicle!

We are going to be seeing more and more autonomous vehicles on our streets and highways in the next five years. California, Arizona, Pennsylvania, Michigan and Nevada have already seen electric “robo taxis” hit the road. The influx of autonomous vehicles presents a tremendous challenge to the insurance industry, since there is no driver to insure. As we see a proliferation of autonomous vehicles, insurance companies will most likely only be insuring the manufacturer of the car, and not the users of the vehicle.  This is good news for drivers who give up their cars for robo taxis, but perhaps not great news for the insurance industry.