Electric Vehicle Insurance

Electric vehicle insurance
Electric vehicle insurance

While there is no doubt that the EV market continues to grow, there is some concern that the electric vehicle insurance sector is still a little behind the times. Many would have expected the insurance sector to be ahead of the game and forward thinking but if you take a step back, the technology relating to electric cars is changing so quickly that it is difficult for the insurers to know what might happen next.

There are some encouraging signs within the electric car insurance sector and it has to be said that the Internet is playing a major role going forward.

Cheap EV insurance

It may be some time before we see as much competition in the electric vehicle insurance market as we see for traditional diesel/petrol vehicles. These are markets which have been developing for many years now and with millions of customers around the world there is a degree of certainty about what the future holds in relation to the costs which insurers will have to take on. The same cannot yet be said of the electric vehicle market but we are certainly getting there.

Quote from ElectricForum.com: "I recently bought a used GEM and am having difficulty with my insurance company. For example, they want my wife and I to take a motorcycle safety class. (Every motorcycle safety class that I have found requires you to ride a motorcycle). Specifically, what company do you recomend, and how does the underwriter handle, vehicle classification, purchase price, and annual milage? I need to drive the GEM on public roads. (speed limit less than 35 of course)"

Competition is growing

At this moment in time, it is the U.S. electric vehicle market which is powering ahead, with the likes of Tesla leading the way. Initially many of the leading automobile insurance companies were a little reluctant to join the electric vehicle market often suggesting they were open for business when in reality the premiums were unaffordable for many people. However, as in any insurance market, it only takes a couple of major players to break ranks and before we know where we are there is competition everywhere. Progress is being made, premiums are coming down and as the insurance industry learns more about the electric vehicle market this is a trend which will most certainly continue.

Should governments offer EV insurance incentives?

In years gone by governments around the world paid lip service to the electric vehicle sector only to fall by the wayside when it came to actually showing cold hard cash. The same cannot be said of recent events in the electric vehicle market with the US government and European counterparts very proactive in the funding of electric vehicle projects. Indeed not only have governments funded companies directly but also offered an array of incentives to motorists. It is probably a step too far to expect governments to enter the EV insurance market but the more popular electric vehicles become, partly as a result of government financial incentives, the more competition will emerge in the insurance sector.

Are the pieces of the jigsaw in place?

At this moment in time it would be wrong to suggest that all of the pieces of the electric vehicle market jigsaw are in place. There has been great progress over the last 10 years or so and indeed many experts believe we are on the brink of cracking the mass market. The technology has arrived, government funding has been welcomed and while the insurance market has been slow to react there is certainly movement of late. The pieces of the jigsaw are certainly on the table now we need to put them together!

Electric Car Insurance Issues

CARinsurance
CARinsurance

British drivers would receive between £2,000 (US$2,900) and £5,000 (US$7,300) as subsidies when they purchase electric or plug-in hybrid vehicles. This grant was announced by Transport Secretary Geoff Hoon as the government pushes for the use of electric cars in the country’s roadways.

Current statistics indicate that this market is an untapped area as there are less than 0.1% electric cars among the current registered vehicles in the UK. This though, has created a new area of concern that is the insurance coverage for these kinds of vehicles.

One fourth of the fixed costs of owning a car in the UK goes to insurance. Not many in the insurance industry offers electric car insurance and if a company does, its coverage is lower than the conventional internal combustion car coverage. This offer applies only if the electric car is the secondary vehicle of the family. Because of the increased safety features, electric car insurance also comes at a discount.

Because of the unique configuration of the vehicle, finding the right insurance coverage would be like looking for insurance on one of a kind or specific requirement coverage. It is thus imperative that your insurance company has knowledge on the workings of an electric car and the coverage requirements. Also important is the owner’s track record as a driver. There is a growing conclusion that electric vehicle owners are quite dependable and responsible. Also, make sure of the liquidity of the insurance company as it would be a problem if they were unable to satisfy your claim.

Another issue would be the cost of repairs for an electric vehicle. While this is a common concern for most insurances, the highly technical nature of the vehicle would surely drive repairs cost for the insurer. This would only be for the short term as the popularity of the vehicle increases, so would the cost of repairing the vehicle decrease. As this happens, the premiums of the electric car insurance coverage would certainly decrease along with the trend.