The Electric Cars Risk Becoming Uninsurable new Report

 

The Difficulty with battery repair costs forces insurers to deny cover

Electric cars risk becoming effectively uninsurable as analysts struggle to put a price on battery repairs, a car insurance industry researcher has said. Jonathan Hewitt, chief executive of Thatched Research, the automotive research center for motor insurers, said a lack of insight and understanding of the cost of repairing damaged electric car batteries was driving up premiums and resulting in some providers completely are refusing to provide cover

Electric cars can be particularly expensive to repair, costing on average a quarter more than a petrol or diesel vehicle. Experts have previously warned that the cost and complexity of repairing electric car batteries after minor collisions could increase. "The challenge is that we have no way of knowing if the battery has been compromised or damaged in any way," said Mr Hewitt.

This means that if the battery cells are damaged in a collision, a catastrophic fire can occur. What we are currently struggling to understand is how we approach this diagnostic technique. is like trying to figure out what's wrong with you without a note or xer John Lewis Financial Services stopped providing car insurance for electric cars to new and existing customers last month because its Underwriter Covians analysis of risks and costs

Aviva removed insurance products for the Tesla Model Y earlier this year before reinstating it several months later, according to the Association of British Insurers. The average cost of insuring an electric car rose 72 percent through September, compared with 29 percent for gasoline and diesel models, according to Confused.com, which helped push annual premiums to record highs.

Mr Hewitt said premiums would eventually begin to equalize for petrol and diesel cars once actuaries had the tools to better understand the risks of insuring electric cars, saying the problem was "short-term". However, he added, the battery is a very expensive component of an electric vehicle, and until we find effective ways to deal with it, we have the challenge of high premiums for electric vehicles that no one wants.

Some customers are now being quoted more than £100 a week to insure their electric vehicles, while others are reporting double or triple the cost of electric car repairs compared to a year ago. One reason for the sharp increase is recommendations to keep electric cars 50 feet apart in repair yards due to the risk of exploding. Cars should be quarantined which is usually more difficult than a petrol or diesel car fire.

The Paris transport operator recalled 149 electric buses from operation last year after they caught fire on two separate occasions Tesla-Fire.com 25 reports of Tesla's catching fire globally since the start of 2023