March 3rd, 2021 at 1:07 pm
The two main talking points about EVs are their front end costs – they are expensive – and motorist’s concern about charging points. There are lots of incentives to tempt drivers into the new technology both to offset the purchase price and to help with the costs of installing a charging point. Certainly, their running costs are significantly cheaper than petrol or diesel cars, particularly if you can install a charging point at your home and also generate your own electricity from solar or wind power. And, there is cheaper Vehicle Excise Duty and zero congestion charges in certain cities but what is the landscape for insurance? Not much of the debate focuses on this and for some motorists, this can be a bit of an afterthought.
Traditionally, premiums have always been more expensive than on a conventional fuel vehicle. Insurers work on averages gleaned from historical data particularly when it comes to the cost of repairs and there wasn’t any when these cars first hit the marketplace. Premiums were high as insurers tip-toed around the new technology and some insurers declined to get involved at all meaning a more limited pool of companies to choose from for the new electric motorist.
As with all new things, the market is settling, the cars are becoming less of a novelty and there are more of them about and so insurer confidence is growing, more companies are entering the marketplace and with more choice, naturally the premiums are starting to come down. Interestingly, one slightly unusual factor is that it would seem that certainly at the moment, electric cars are less of a theft risk seemingly and if they are stolen, appear to have a greater chance of recovery. If the battery is low or flat then logically, the thief is not actually going to get very far!
Faults and repair
One of the determining factors that insurance companies use to gauge premiums is the type and cost of repair which was all largely an unknown when these cars first came appeared. Now, there is a track record of repair and garages are acquiring knowledge about which faults are likely and how to mend them. There are fewer components that move in an electric engine and so the potential for faults and breakdown should, theoretically, be lower. The most expensive part of the electric engine is the battery packs and due to their location, usually underneath the vehicle, they are relatively well protected in the event of an accident and seemingly less vulnerable to damage.
Silence is golden
One of the essentials of insurance whether you opt for fully comp or third party is the third party element of injuring or killing another motorist or road user. Because electric vehicles are reasonably quiet (although this is due to change), the insurance market has yet to encounter the first serious injury or fatality that occurs due to the fact that the victim couldn’t hear the car coming. This may have an upward impact on premiums for a while although as a reaction to this problem, new EVs are being equipped with a range of noises to alert other road users to their presence.
The advice seems to be to shop around and to compare coverage prices more carefully than if you were insuring a standard petrol or diesel vehicle. The price comparison website, GoCompare states, “…green cars are becoming increasingly mainstream, meaning that more and more insurers are looking at providing policies. As the number of insurers goes up, the cost is likely to fall. With electric car insurance, it’s more important than ever that you don’t simply auto-renew at the end of a year.”
Are the insurance policies different?
The technology is different so are the policies different? Essentially, no, but as with any policy, motorists do need to be absolutely clear on what’s covered as this does vary. There are additional elements with an EV that a motorist may not even consider, after all, this is not something you tend to focus on when insuring a car with a conventional engine – you expect all components to be covered unless there is some unusual or bespoke modification.
Ask the insurer whether the power cables are covered. Naturally, as more electric cars come into usage and more people are charging them, particularly at home, power cables would become an obvious and desirable theft target. Some manufacturers require the driver to lease the battery – this is a separate and freestanding arrangement to financing the entire car by leasing or PCH, Personal Contract Hire. Ask the insurer whether you will require a separate policy to cover the battery if you are leasing it or is it covered within the policy as part of the car. Usually, if a separate policy is required, the battery lease company won’t miss an opportunity to upsell and find you a policy so it should quickly become apparent but it is worth checking.
As with all new developments, there is a gap in the market to be filled and so now there are some firms appearing who are specialist electric car insurers, an example of one of these would be Pluginsure who have over a decade providing insurance in this market. New players offer incentives such as discounts and also a donation to an environmental charity for every policy taken out, a real play on the conscience of the green agenda motorist.
Price comparison websites should be your starting point but, as with any car insurance policy, not all insurers are on price comparison sites so don’t miss out on the niche businesses particularly in this fledgeling market. The usual rules of engagement to find the road to lower premiums still applies. Keeping your car off-road and in a garage will always make your insurer happy as will additional security protection against theft.
This may be offered as an ‘add on’ by your insurer or you might have to speak to one of the main players in the breakdown and recovery market. It is important to have a conversation with them that is specific to your EV – what happens if you run out of charge in error, will they recover you? Can they charge by the roadside even? Breakdown companies are having to adjust to this new technology just as much as insurance companies.