Electric car and plug-in hybrid insurance

EV and PHEV insurance

Why is electric car and plug-in hybrid insurance any different from ‘normal’ car insurance?

The simple answer is that it is no different, yet many ‘general’ insurance companies insist on treating it as different, charging extra loadings on the premiums for hypothetical ‘additional’ risks. Additionally, many have inflexible online quote systems which have not yet integrated electric and plug-in hybrid models.

An electric car driver can choose from one of the general insurance companies who have looked at the market and are able to offer insurance for these vehicles or to go to a ‘specialist insurer’ who have a deep understanding of the market and can often offer a better value premium. See bottom of page for examples of both types of insurance company.

Calculating electric car and plug-in hybrid premiums

Insurance companies base their premium calculations on ‘assessing historical risk data’ and with the recent revolution in electric cars and plug-in hybrids, there isn’t a significant amount of ‘past history’ to assess.

Added to this with new models coming to the market nearly every month – not every insurer will have the resources available to research these new models and the advances in performance. For them, it’s often better to stick with what they know – the ‘standard vehicle’ market. There are plenty of diesel superminis out there with more than enough historical data.

With a specialist electric car and plug-in hybrid insurance schemes, driving this type of vehicle is looked upon favourably by the Insurer. They want to insure drivers like you! You have made a conscientious and ethical choice in the type vehicle that you drive and some schemes view this as a decision of a responsible and considerate driver. These types of drivers care about their vehicles and the way they drive them – and research received back from specialist schemes so far verify this.

General insurer vs specialist electric and PHEV scheme

General Insurers Said Specialist Insurers Replied
Premium needs to be higher, as a caution to these ‘new’ vehicle types Owners deemed responsible and considerate – better risk and discounted premium accordingly
Repairs are going to require expensive specialist mechanics False – as with ‘usual’ car insurance, insurers have approved repairers at an agreed cost
Replacement parts are going to expensive and hard to find Untrue – the parts are, in fact, usually much cheaper due the types of materials used. These cars are built up from less parts, in comparison to a petrol car, so less part to replace
Fire Risk – some batteries could be considered fire hazards, particularly in the event of a collision The risk is not different to that of a petrol vehicle – in fact, the early warning devices and cooling systems installed on some models make them much safer
Pedestrians – near silent running may mean some pedestrians are unaware of approaching vehicles and increase risk of collision Many pedestrian are equally unaware of all vehicles due to use of mobile devices. Conventional cars also becoming quieter
Long charging cables are a ‘trip’ hazard. Insurance company may face liability This was an old concern that no longer exists, modern charging stations and charging points allow cars to pull right up to the cables and don’t tend to have long cables left hanging whilst recharging
Expensive Batteries – will make claim costs very high Although it is true that the batteries in these types of vehicles are expensive, many have been made much more robust to limit damage. Some now contain many smaller batteries, so replacements will only be required to any damaged area, reducing the cost significantly

As you can see many of the issues identified by general insurance companies, are not seen as such by a specialist insurer. These insurers have dedicated teams that research, analyse and understand every detail of this new range of vehicles. At present, for many of these specialist insurers you will find that the premiums are more competitive than a ‘general’ insurance company or aggregator site.

Key reasons for this include;

1. There is an understanding that electric vehicle and plug-in hybrid owners are more conscientious drivers and that this is often reflected in a more safer driving style

2. As an incentive for driving ‘environmentally friendly’ vehicles, some insurers offer a discount on the premiums

3. Early research has shown favourable results for electric and plug-in hybrid owners with many of the ‘general’ insurance companies’ concerns remaining unfounded

Recommendations for EV and PHEV drivers

The market is still in the early growth phase; in the not too distant future, many insurers will be more than happy to cover these types of risks, knowing confidently what many specialist insurers already know – these are high tech vehicles driven by intelligent and safe drivers.

When looking to insure a new electric car or plug-in hybrid, it is recommended that you don’t just accept a quote from a standard insurance company or aggregator site but you also contact and obtain a quote from a specialist EV and plug-in hybrid insurer, as you may well be able to get a better deal.

Electric car specialists:

Sky Insurance: run a hybrid and electric car insurance scheme

Electric.insure: offer electric car insurance

General insurance companies that offer an electric car or plug-in hybrid policy:

Admiral, Aviva, Liverpool Victoria and Mitsubishi Insurance

Peter Thomas

Author:Peter Thomas
Date Updated:10th Mar 2015

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