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23 Sep, 2019|

Electric Vehicles: What Are The Insurance Impacts?

There are plans to ensure that all new vehicles are ‘zero emissions‘ by 2040 (or possibly 2032). Effectively spelling the end of petrol and diesel vehicles. So, it is likely that we will all be looking to switch to electric vehicles over the coming years.

Other than the obvious differences in how the vehicles are powered, are there any differences when it comes to electric vehicle insurance?

Are there any differences in insurance for electric vehicles?

There are some differences when it comes to electric vehicle insurance, including.

Electric vehicles are still relatively new – they are also, relative to petrol and diesel vehicles, relatively expensive to purchase. This means that from an insurance perspective, costs to repair and replace parts are higher.

Responsibility for the battery – many electric vehicle owners will lease the battery that powers the vehicle. The benefits of this arrangement are reassurance over a replacement battery being provided by the manufacturer if capacity should fall. Yet, it can add complications from an insurance perspective. Particularly who would replace the battery if the vehicle were involved in an accident – the insurer or manufacturer?

It may be necessary to find a specialist insurer – Currently not all mainstream insurance companies offer insurance for electric vehicles so you may find that you are more restricted when it comes to looking for a policy.

Collision risks – Given that electric vehicles make very little noise when in motion compared to petrol and diesel vehicles, there is thought to be an increased collision risk. This needs to be considered by insurers to ensure that the risk is properly underwritten.

What does this mean for electric vehicle insurance premiums?

At the current time, the above factors as well as others, mean that electric vehicle insurance costs are likely to be higher than those for petrol or diesel vehicles.

Some reports suggest that costs of electric vehicle insurance could be as much as 14% more than for a petrol or diesel vehicle.

Yet electric vehicles are thought to be cheaper to run. Given the government’s focus on reducing emissions there are also a lot of incentives around for those thinking of switching to an electric vehicle. It is also thought that electric and hybrid vehicles are less likely to depreciate in value than other fuel types.

If you are thinking of changing your vehicle to an electric one, all these factors need to be taken into account to give a true reflection of long-term costs.

What could the future hold for electric vehicle insurance?

As with all things, as electric vehicles become more commonplace on our roads, it is likely that associated costs such as insurance will decrease. We are also likely to see more competition in the market which is typically good news for premiums.

In the USA, Tesla has also just announced a move into the car insurance market. Confined only to the USA at the moment, Tesla is acting as a broker to arrange car insurance for Tesla owners. They have also revealed plans to move toward becoming an insurer in their own right.

Therefore, we may see more specialist insurance solutions for electric vehicle owners as time goes by.

At Anthony Jones we work with a range of insurers so are well placed to be able to find a solution for your electric vehicle insurance. Whether you are looking to insure a fleet of vehicles, or a single private use vehicle we can work with you to get the right insurance for your needs. Contact us today.