EV insurance premiums charged up
Reinsuring plugs into a problem of new technology and unknown costs
Electric car (EV) owners are increasingly finding it difficult to reinsure their cars.
Report in the media reveal extreme price rises, or not being able to reinsure.
According to an article in The Guardian, EV owners are seeing premiums more than quadruple.
They write that ‘driving an electric car should be a win-win, saving money and the planet’.
However, one owner with. a Tesla Y found the the annual cost of insurance rocketed from £1,200 to more than £5,000.
“My insurer was Aviva from July 2022 to July 2023, but when it was coming up for renewal, I received a letter stating that they would not be covering the Tesla Model Y any more,” David says. “I am a member of a Tesla UK owners forum, and lots of other people seem to be having the same issue.”
In the Facebook group, members share stories of horror renewal quotes, with increases ranging from 60% (up to £1,100) to a staggering 940% (a jump from £447 to £4,661, according to a screengrab shared by one driver).
Owners report spending weeks on comparison sites, or trying individual insurers and specialist brokers. However, the problems seem to be across the board.
Privilege, Vitality, Axa, Aviva, John Lewis and the specialist broker Adrian Flux are among the brands mentioned in the article.
“The best quote I could get was from Direct Line at £4,500,” states one owner. He adds that the total cost exceeded £5,000 once the interest for paying monthly was included.
It seems that, like the government, insurers are wobbling about the cost of net zero and comes as all motorists face rising insurance costs. Prices are at an all-time high.
A recent cost of living bulletin from the Office for National Statistics revealed that the price of car insurance is up by 52.9% in the last 12 months.
However, according to the report, EV owners are up around 70% according to confused.com. Meanwhile, for petrol and diesel car drivers, the increase is 29% over the last 12 months.
Louise Thomas, a motor expert at Confused.com, says: “Despite electric vehicles becoming more common, they are still the minority on UK roads, and insurers have less experience setting premiums for these types of cars.”
With expensive features and upgrades now standard for electric cars, the cost of repairs is higher, too, which is having a knock-on effect on premiums, she adds.
Analysts say claims costs are 25% higher for electric cars, and that they also take about 14% longer to repair than a diesel or petrol equivalent.
The cost and availability of parts is a factor, explains Paul Baxter, the chief executive of the new brand the Green Insurer. There is also concern around the batteries, and that damage, especially to the underside, can be expensive to fix.
“There’s also an issue around technology and skills in the repair networks,” Baxter says.
The Institute of the Motor Industry has predicted a shortage of about 16,000 electric vehicle-qualified mechanics come 2032.
“They’ve not got to the stage they are with traditional cars in terms of expertise,” ads Baxter. “If you dent a door, that’s straightforward, but if something has damaged the battery, in particular, they haven’t caught up with that.”
Read the full Guardian article here.