As insurance brokers with access to most insurers, we approached a number of our underwriters to understand why Electric Vehicles (EVs) were so problematic and therefore expensive to insure. Some of the answers coming back were repeated by the many, which perhaps adds some credence to these explanations. We’ll list the main reasons and try to add some explanations to the issues.

Untested technologies – adds to the fear factor for an underwriter. You’ve perhaps heard of some mobile phone batteries self-combusting for no apparent reason, well times that by 10,000 and that’s a potential bomb driving around. Underwriters will always take caution before hunting profits, so until these machines have proved themselves, then why take a risk.

Expensive Repair Costs – Whilst its still the same looking metal box on wheels, the technology underneath is profoundly different, and the cost of replacing the battery alone is sometimes quoted at £15-£20k per vehicle, and safety comes first, so even the slightest dent to a then compromised battery, and you’re probably writing the car off.

Lack of Repairers – The network of repairers with the necessary knowledge and equipment to make repairs is apparently very small, and often vehicles are being referred back to the manufacturer, making dealing with claims more problematic and time consuming. And don’t forget courtesy and hire cars cost money so when things take longer the costs go up.  

There were several other minor points feeding back but the above seem to be repeated. And whilst this all may be doom and gloom we do think insurer rates are coming down. It wasn’t uncommon to see fleet underwriters quoting between £2k – £3k for EVs going on fleet policies prior to the pandemic, but today there’s more insurers quoting and we’re slowly seeing rates coming back down to earth.

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