In the last two years there has been a rapid increase in electric-powered cars. Statistics suggest that there are over 520,000 pure-electric cars on the roads in the UK, with more than 930,000 plug-in models (including hybrids). 2021 saw the largest increase annually in the number of electric vehicles registered, with growth of around 74%. 2022 looks set to be an important year for electric vehicles as they are on track for a sales record.
With this growing trend, what additional factors should be considered when opting to drive green?
Brokers are experiencing the placement of motor insurance for electric vehicles a challenging task. The industry anticipates that electric vehicles, new technology and new energy will have a significant impact on insurance policies and premiums for clients.
What should you do and consider if an electric vehicle is on your short list?
- Let your broker/insurers know in good time. Some insurers are not accommodating additional high valued electric vehicles to your motor insurance policy. Electric vehicles are often added to policies as accommodating business, to support large motor policies or business relationships. As a result, if you only have a small fleet of vehicles, your insurers may not be able to accommodate the request.
- Additional costings. Although many electric vehicles are smaller and potentially less powerful than traditional vehicles, the parts are inherently more complex. Given the complexity of the repairs, in the event of a claim, only select garages can carry out the works. This can result in longer wait times for repairs and larger claim costs. It is usual for a tracker requirement to apply as standard on electric vehicles. Many insurers also go that step further and even request Pin to Drive to be installed on Tesla’s. All these are at the expense of the policyholder.
- Driver restrictions. Once all the above is considered, getting the appropriate cover for a suitable premium, insurers are likely to add additional driver restrictions. Across the market you are unlikely to find many insurers that are willing to allow any driver under the age of 30 to drive. In addition, they would require a minimum of 2 years driving experience.
We remain optimistic that as alternative vehicle technology becomes more mainstream, maintenance, parts and insurance costs may decrease. Government incentives, business discounts and specialist packages are becoming more freely available to try and assist any extra financial burden of driving green.
So, whether you are a company with a smaller motor policy, a large motor fleet dealership or a solo eco-friendly driver, there are extra things to consider when making your purchase.
The above facts are made on the broad assumption of the market as a whole. Some policies may be the exception to the rule. If you do have any queries or comments, please contact your broker/insurer for further advice.
By Beth Johnson Cert CII – Commercial Account Handler