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Check with your insurance company BEFORE buying a new car

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Insurance companies, in many ways, are a necessary evil. You have to have financial coverage on your vehicle if you plan on driving anywhere in the United States, and for a certain amount of money paid per month you get that protection if you’re in a crash. Is it a perfect system? No. Is it the system we have? Yes.

With electric vehicles, there’s a ton of information (and misinformation) out there about insuring an EV. It’s important to remember that when it comes to being insured, it’s all about risk and profit. If you are someone who would likely cost the insurance company more in payouts than what it’ll make in premiums, you’re a higher risk and less likely to be insured.

We aren’t actuaries here, but people who say “two seat cars are more expensive to insure,” or “well the bigger engine is more expensive to insure” isn’t always correct. How much is the vehicle worth? How expensive is it to fix? What are the likely damages in a crash? How likely is the particular driver going to file a claim? All of this goes into factoring how much you pay for insurance, and not just the seats or motor. In many cases that doesn’t make a difference at all.

However, how much it costs to repair your car in a crash does matter. With automakers like Tesla using mega- and giga-castings, it has lowered the cost for the OEM to manufacture the car. The problem is that if that casting is damaged on the road, it’s not as easy to fix. That drives up repair costs which – guess what? – also drives up insurance premiums. EVs aren’t inherently more expensive to insure just because they’re EVs, but rather because the manufacturing methods like these mega-castings make the cars more expensive to fix.

Plus, there are some usual cost drivers, such as a battery pack which is expensive, but OEMs are working on ways of reducing that cost long-term. But that’s not the point of this recommendation post.

Because all of this is a bit unknown and in flux, you should always check with your insurance company before buying your new vehicle. This is especially true if it’s an electric vehicle, and even more true with a vehicle like a Tesla.

It was being reported last week (at the time of this post’s initial publication) that Geico was arbitrarily dropping Cybertruck owners. Upon some follow-up, Geico said that’s not true. Insurance companies are in the business of making money, and dropping customers for no reason doesn’t make them more money. But people do claim they’re being dropped.

Geico denies the claim that it's no longer insuring Cybertruck, but a scan of the forums suggest that its costs are super high, it requires commercial vehicle insurance for the model in some states, and some have been dropped entirely.

👻⚰️dead niedermurder⚰️👻 (@niedermeyer.io) 2024-10-07T15:49:28.163Z

The point is, you might not know what your insurance company is going to do when you add a new vehicle to your policy. If you’re a great driver and live in an area where a claim is less likely, you’ll probably be fine. But if you live in a higher-risk area, are a higher-risk driver, or buy a car that’s a pain in the butt to fix, you might end up paying more or not even be covered at all.

The best way to avoid this, in most cases, is to reach out to your insurance company first and ask them. Ask them for a quote on the specific vehicle you’re looking to buy. Ask them if they cover this vehicle. The only way to know how much you’re personally going to spend is to reach out and ask them, and then if you think that rate is too high you should shop around.

None of this protects you from an insurance company dropping you in the future because it decided the vehicle was too risky in hindsight, but that’s not something that really happens all that often. If you are buying something completely out of the norm, like a Cybertruck, that risk is higher. But again, businesses like making money and someone out there will insure you.

It might be a lot more money than you’re willing to pay for insurance, but that’s why you ask ahead, shop around, and know going in what you’re getting yourself into.

For the Cybertruck specifically, it’s an early-adopter product. Early adopters always expose themselves to more risk. In this case, the product is a lot more expensive since it’s a vehicle and not a smartphone, but the same level of risk remains. If you are a risk averse person, the Cybertruck might not be right for you.

  • Chad Kirchner

    Chad is the Editor-in-Chief and founder of Destination Charged. He has nearly 15 years of experience in the automotive industry, working for a variety of publications in both print and online. He was also the co-founder of EV Pulse, another site devoted to electrification in automotive.

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