More U.S. drivers switching from gas cars face increased accident risks and higher insurance costs

Drivers who switch from gas-powered vehicles to electric vehicles (EVs) may face a higher risk of accidents and more expensive insurance claims, according to a recent report. The study found that in 2024, drivers who replaced their internal combustion engine (ICE) vehicles with EVs were 14% more likely to file an insurance claim. These claims were also 15% more severe and cost 31% more than those involving ICE vehicles, based on data from LexisNexis.

The findings are consistent with a recent Insurify report, which showed that EVs generally cost 49% more to insure than ICE vehicles. “Insurers base prices on risk, and insuring a car that’s more expensive to repair or replace adds to the company’s financial risk,” said Julia Taliesin, author of the Insurify report.

In 2024, the number of insured EVs in the United States rose by 40%, reaching 5.6 million. This growth rate was much higher than the increase for all private passenger vehicles during the same period. Despite there being fewer EVs on the road compared to ICE vehicles, LexisNexis reported that paid claims for EVs outpaced their share of total vehicles.

The report attributes this trend to a learning curve as drivers adapt to new vehicle technology. LexisNexis noted that similar transition risks occur when drivers move from small sedans to larger pickups or SUVs. According to the report, “The distinct driving experience of EVs leads to an even larger learning curve, with a higher initial increase and steeper subsequent decrease from claim frequencies.” As drivers become accustomed to their new EVs, claim frequency is expected to decline.

However, even as crash risks may decrease over time, high repair costs are likely to keep insurance premiums for EVs above those for ICE vehicles. Data from Mitchell International shows that repairing an EV typically costs 22% more than repairing an ICE vehicle. In 2024, the average claim cost for an EV was $5,927 compared with $4,857 for an ICE vehicle.

Julia Taliesin explained factors contributing to these costs: “The average price of a new EV is higher than the average for a gas-powered car,” she said. “To repair an EV, you might only be able to get original manufacturer parts, which tend to cost more than aftermarket and recycled options. And labor costs are generally higher for EVs because mechanics typically need specialized training and work more hours to repair an EV.”

LexisNexis recommends that insurers take proactive steps in addressing transition risks associated with new EV ownership in order to maintain profitability as adoption grows. The company stated: “U.S. auto insurers need to better understand the risks associated with recent changes in households, drivers or vehicles,” adding: “Drivers of EVs have steeper learning curves as they adapt to the distinct driving experiences. Insurers should account for transition risk in their underwriting and pricing practices.”