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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 differently, charging extra loadings on the premiums for hypothetical ‘additional’ risks. Many have inflexible online quote systems which have not yet integrated electric and plug-in hybrid models.

An electric car driver should choose from one of the general insurance companies that have looked at the market and are able to offer insurance for these vehicles. Alternatively, drivers could go to a ‘specialist insurer’. see the bottom of the page for examples of both types of insurance - general and specialist.

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.

With new electric car models coming to the market nearly every month, not every insurer will have the resources 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 specialist electric car and plug-in hybrid insurance schemes, driving this type of vehicle is looked upon favourably by the insurer. You have made a conscientious and ethical choice in the type of vehicle that you drive, and some schemes view this as a decision of a responsible and considerate driver. These types of drivers are thought to care about their vehicles and the way they drive them – and research received back from specialist schemes so far verifies 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 standard car insurance, insurers have approved repairers at an agreed cost
Replacement parts are going to be expensive and hard to find Untrue – the parts are usually much cheaper due to the types of materials used. These cars are built from fewer parts, in comparison to petrol cars
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 are 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

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. Some specialist insurers' offers more 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

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 insurance providers

These days, many insurers are offering specialist electric car insurance. If you're concerned about covering the additional equipment you'll need for an EV, such as charging cables and batteries, it's worth investigating which insurer offers a comprehensive EV product. Amongst others, LV= is one of the UK's largest car insurers and offers comprehensive electric car insurance.

Ben Lane

Author:Ben Lane
Date Updated:10th Apr 2019

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