Electric cars are no longer a forecast into the future, today they are firmly rooted in our transportation system and the demand for them is only increasing.
With growing concerns for our environment, it’s easy to see why companies and drivers are taking a greener route.
Take Amazon, for example, one of the biggest companies in the world, they have stated that they want to have 100,000 electric delivery vans by 2030. Similarly, London is currently pushing for Uber, the infamous taxi service, to go all-electric.
And, going electric isn’t just beneficial for the environment. Company car drivers who choose to drive electric vehicles will pay no benefit-in-kind tax in 2020/2021, saving huge amounts of money on company car tax, along with vastly reduced cost-per-mile.
Not only this but there are incentives ranging from initial purchasing grants to cheaper VED road tax and Congestion Charge exemptions.
So, companies across the world are currently all-for electric but what about consumers?
Looking at statistics over the past few years, registration for plug-in cars has seen an increase from 3,500 in 2013 to 246,000 by 2019.
With this in mind, is there a difference between insuring electric cars and regular motor vehicles?
Keep on reading to find out!
Why is electric car insurance expensive?
The successful rise of Tesla has showcased the consumer-demand for environmentally friendly cars that also increase driver safety.
And with no petrol or diesel in-sight, electric cars are surely proving more cost-effective overall, right?
Well, it’s complicated.
Whilst running costs are definitely lower due to electric charging when it comes to insurance, electric cars have previously proven more costly.
If we think about this from an insurer’s perspective, costly insurance for electric cars makes complete sense.
Given that electric cars were new to the market a few years ago, companies such as Tesla, Nissan and Renault found it difficult to find cost-effective insurance for their models.
Without accurate historic data, insurers have had difficulty in calculating the cost of repairs, leading to overly cautious predictions and raised premiums.
While franchised dealers may be geared up to repair electric vehicles, it can be more challenging for independents, and the smaller body shops, to invest in training and equipment.
This could potentially leave fleet operators with less choice about where their vehicles are repaired. Industry figures show around 23% of leased cars and 33% of leased vans are repaired by independent workshops, which can be typically cheaper than franchised dealers.
There have even been insurers that have declined to insure electric cars which have then resulted in higher insurance prices.
Will electric car insurance get cheaper over time?
As mentioned above, the demand for electric cars has been rapidly increasing.
Due to this, more people have been purchasing and driving electric cars, which then gives insurers more data for the cost of repairs.
With more data in hand than before, more and more insurers are now starting to enter the market, which may result in insurance prices coming down.
There are a few reasons as to why electric car insurance could actually start to come down in price.
One of these is the fact that electric cars are less likely to be stolen than normal vehicles and are more likely to be found if they are.
This is due to electric cars being limited by range based on the amount of charge they have.
When you also factor in that charging an electric car is very time-consuming, it greatly reduces the risk of burglars stealing them as opposed to regular vehicles.
Another main difference between electric cars and motor vehicles is the way the engines are built. With electric cars, there are few complex moving parts that are at risk of being damaged.
Repairers are now starting to understand the electric car engines in greater detail, meaning more people are developing the expertise required to fix the cars.
There is also a good level of protection for the most expensive part of an electric car: the battery pack.
It has also become apparent that the battery packs – the single most expensive part of an electric vehicle – are reasonably well protected in the event of an accident, reducing the risk of costly replacement.
So, battery-pack protection, increasing repairer expertise and a more streamlined engine may result in electric insurance costs coming down in the future.
Is getting fleet insurance the same for electric vehicles as it is for normal vehicles?
From the customer and insurer perspective, the process of getting fleet insurance for electric vehicles is the same as a normal vehicle.
However, due to the market being smaller and still in its infancy, not every insurer will provide a fleet quotation for electric vehicles.
For insurers that do provide a fleet quotation, they may impose additional terms and conditions e.g. they may require a tracker fitting to the vehicle, depending on the value.
Some insurers may still be reluctant to insure Teslas, for example, until they have sufficient data on the cost of repairs. As mentioned above, repairers are now starting to understand electric cars better and how to fix them.
However, this is still a very small percentage of garages and while this percentage is set to increase over time, repair costs will be higher due to the smaller number of garages.
The future of electric car fleet insurance
While electric car insurance may seem to be expensive at the moment, as time goes on and insurers can collect more information, the gap between electric and motor vehicles will narrow.
Currently, you can still expect insurance to be more expensive for an electric car than a standard vehicle.
However, as electric vehicles become more commonplace and consequently the need to repair these vehicles increases, more and more independent garages are embarking on training their technicians to service and repair hybrid and electric vehicles.
This means that there is more data available for the cost of repairs, allowing insurers to more accurately assess their premium levels, meaning more insurers have entered the market and so costs have come down.
It’s also important that insurance buyers are absolutely clear on what’s covered by any policy because it can vary and it is easy for owners to overlook the need to cover some of the additional equipment that comes with the vehicle, for example, power cables.
If you buy or lease one of the electric vehicles that require you to lease the battery, it is also important to establish whether you have to take out separate insurance to cover the battery as well as the vehicles, in the event of suffering accident damage or theft. The company through which you arrange the battery lease should be able to help with this.
If you are looking for insurance on a fleet of electric vehicles the most important action to take would be to contact a fleet insurance broker, such as Fleetcover.
At Fleetcover, we work with the UK’s largest Insurance providers for fleets to get you a professional, hassle-free policy proposal.
We have access to a carefully selected panel of over 20 different insurers, meaning we can provide you with a competitively priced, comprehensive insurance policy.
For more information, please contact us below!