Electric cars risk becoming uninsurable
Difficulty pricing battery repairs forcing insurers to refuse cover
ByMattie Brignal, SENIOR MONEY REPORTER20 October 2023 • 5:00pm
www.telegraph.co.uk
John Lewis Financial Services stopped providing car insurance for electric cars last month for new and existing customers, as its underwriter Covéa analysed risks and costs.
Aviva removed insurance products for the Tesla Model Y earlier this year before restoring them several months later.
Vehicle repair costs rose 33pc over the first quarter of 2023 compared to 2022, helping to push annual premiums to record highs, according to the Association of British Insurers.
Average electric car insurance costs rose 72pc in the year to September, compared to 29pc for petrol and diesel models, according to Confused.com.
Mr Hewett said premiums would eventually begin to level out and match those of petrol and diesel cars once actuaries had the tools needed to better understand the risks of insuring electric cars, saying the issue would likely be “short term”.
However, he added: “The battery is an extremely expensive component of an electric vehicle and until we find efficient ways of dealing with it we have the challenge of high premiums for electric vehicles, which nobody wants.”
Some customers are now being quoted over £100 a week to insure their electric vehicles, with others reporting premiums doubling or tripling compared to a year before.
One reason attributed to the steep rise in the cost of electric car repairs stems from recommendations for electric cars to be kept 50ft apart in repair yards over fears they might explode.
