Tomorrow Investor

New Report Shows Key Issues Regarding Insurance and Electric Vehicles

Vehicle insurance is one of the main concerns for car owners the world over, but the rising demand for electric vehicles (EVs) poses new challenges for both car owners and the insurance industry.

In a report issued by the UK-based automotive risk intelligence company Thatcham Research on Wednesday, July 5th, the scarcity of relevant information regarding EV issues, particularly battery-related issues, along with viable repair solutions remains a challenge for insurers. 

For the most part, insurers end up scrapping EVs even after minor accidents. This is a serious cause for concern as it can undermine the more mainstream adoption of EVs on British roads. 

However, insurers say that many EV producers don’t have any guidelines, assessment processes or even repair sources for battery packs damaged during even the lightest of accidents. 

As a result, insurers are forced to write off even those with low mileage; this drives insurance premiums for EVs higher than those of conventional cars and also keeps many people from opting for EVs.

How Regulations Come Into Play

At present, only a mere 1.65% of vehicles running throughout the United Kingdom are EVs. However, EV-related insurance claims have been noted to be more than 25% more expensive than those for their combustion-engine counterparts; repairing an EV also takes 14% more time than a conventional car.

It should also be noted that a facility that can easily hold a hundred conventional vehicles for repair may not necessarily have space even for just a few EVs requiring a mechanic’s attention. This is due to regulations wherein damaged EVs taken to a repair facility need to be placed at least fifteen meters away from other objects due to the high risk of fire. Indeed, even outdoor facilities may, in practice, only have enough space to keep two EVs due to the required distance.

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