Just as the commercial fortunes of EVs has started to improve, a dark cloud has emerged in the shape of increasing electric car insurance costs.
The cost of insurance for all car types has increased over the past 12 months, due to factors including used car and spare parts price inflation, labour shortages, extended vehicle loan times, the rising numbers of personal injury claims and insurers’ falling investment returns.
What's more, premiums for petrol and diesel cars have only risen by 29% within the same period, so what exactly is going on?
How much have car insurance premiums risen by?
According to comparison provider Confused.com, the average premium across all car types has increased by 58% in the past 12 months, from £586 to a record £924. However, this masks higher premium increases for EVs, which in the same period shot up 72%, compared with 29% for petrol and diesel cars.
In a report published earlier this year, Thatcham Research, a specialist in automotive risk intelligence funded by insurers, highlighted the challenges that insurers face in covering EVs and the factors influencing the vehicles’ higher premiums.
They include higher incident claims costs than for ICE cars, longer repair times and the expensive requirement for the safe storage of damaged EVs. Figures from the Association of British Insurers show that claims for EVs are 25.5% more expensive than for their petrol- and diesel-engined equivalents and that their repair times are 14% longer.
What happens when you need to claim for an accident or repair?
Thatcham’s report also raised the consequences of collisions for the viability of an EV, noting that “there is a concerning lack of affordable or available battery-repair and post-accident diagnostic solutions, leading to EVs being written off prematurely and causing claims costs to rise disproportionately”.
On this point, a major problem for insurers is the high cost of a replacement battery relative to the declining value of the EV to which it would be fitted. They range from £14,200 to £29,500, which Thatcham noted was more than the market value of the average EV after only one year.
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An MG ZS EV is about £350 ... So where is the problem?
Ok, I'll say it, that's shocking!, by the time it's an EV or no car, I'll be too old to drive.
This doesn't make sense. ICE car premiums go up by 29 percent yet when you include BEV's it doubles to 58 percent, how the hell do the Small number of BEVs, which have gone up only 72 percent, have that bigger effect.