The Association of British Insurers reported that insurance premiums for all cars, regardless of fuel type, increased by 25% in 2023/2024. Factors contributing to this rise include an increase in vehicle theft, claim inflation, and delays in part supplies, which are still impacted by the aftermath of the COVID-19 pandemic.
Speaking to insurance brokers and EV specialist repairers reveals that higher EV premiums are largely due to insurers’ lack of understanding of battery technology, repairability, and a shortage of trained EV repairers. Additionally, used parts from damaged EVs sold by dismantlers can command high prices, leading some insurers to write off EVs for relatively minor damage to the battery pack.
One of the ironies is that some insurers have bought into myths about EVs, such as concerns over EV fires, battery degradation, and complicated repairs. This misinformation can influence both industry and consumer perceptions, potentially hindering EV adoption.
In conclusion, while it’s true that insurance premiums for EVs are generally higher than for combustion cars, the reasons behind this include factors like higher parts costs, lack of understanding of EV technology, and a shortage of trained repairers. There is a consensus that EV insurance premiums should ideally come down in the future as the EV market matures and insurers become more familiar with these vehicles.