As demand for electric and hybrid vehicles gained steam in recent years, the auto industry responded accordingly. Tesla's various car models' emergence into the mainstream signaled the clearest breakaway from the traditional vehicle. Now, Nissan, General Motors, Hyundai and many more are looking to carve their spot in the market. While drivers might be eager to switch, they should consider all of the implications such a move would entail. The cost of auto insurance, for instance, varies considerably across the country and the type of car being covered is one of many factors that impact a driver's rate. Research from 2015 by NerdWallet found that car insurance quotes for electric cars were 21% higher, on average, than quotes for the gas cars. The differences ranged from 16% higher (for the Volkswagen Golf) to 26% higher (for the Fiat 500). As electric and hybrid vehicles have cemented a place in the current marketplace, it remains to be seen how the insurance industry prices policies for these vehicles going forward. Related: Commercial auto insurers map out a path to profitability

Product liability concerns

Another developing area of concern with electric and hybrid vehicles is the issue of potential product liability. These types of vehicles have a greater technological reliance — as numerous manufacturers are responsible for producing different components — the question of liability comes into play in the event of an accident. Consider this: In May 2018, firefighters put out a blazing battery pack on a Tesla Inc. Model X, but its highly flammable lithium-ion battery cells reignited multiple times after that. "Fires on electric vehicles are rare, but the volatile chemistry of their batteries and the need for special training on how to extinguish them raises new safety questions as automakers are poised to dramatically increased production," reported Bloomberg. In spite of these concerns, sales of electric and hybrid vehicles boomed in 2018. With this in mind, here are the top 10 states for such car sales in 2018, courtesy of CarMax. Related: Select Hyundai, Kia models have high fire insurance claim rates

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Denny Jacob

Denny Jacob is an associate editor for NU PropertyCasualty360. Contact him at [email protected].

Agency Management
Agency Technology
Coverage & Policy Issues
Personal Lines
Sales & Marketing
Auto
Catastrophe & Restoration
Personal Lines
Emerging Risk
Public Sector Risk
Analytics & Data
Technology Implementation
Technology Solutions