Electric vehicles: insurers balk at battery fires and write-offs

Auto Insurers Increase Prices for Electric Vehicle Cover

Tesla owners must be choking on their kale smoothies. Auto insurers have rapidly boosted prices for electric vehicle cover in the past year, much more than for fossil fuel cars. Indeed, John Lewis has suspended sales of its EV policies by request of French underwriter Covéa as it reassesses the cost of repairs.

Higher Insurance Costs for Electric Cars

1. Average electric car insurance costs rose 72% in the year to September, compared with 29% for petrol and diesel models, according to Confused.com.
2. Premiums for Tesla Model 3s, the most quoted EV on the site, rose more than two-thirds in the past two years.
3. Aviva withdrew insurance policies for some Tesla models earlier this year before reinstating cover a few months later.

Challenges with Electric Vehicle Claims

• EV claims are typically 25% higher than combustion equivalents and take 14% longer for repairs, according to research from Thatcham.
• Spare parts are difficult to source, as are specialised technicians.
• Insurers have insufficient data history on the maintenance of EVs due to their relatively new propositions.

Battery Issues and Safety Concerns

Batteries cause problems of their own. These are expensive pieces of kit, worth a significant part of the overall vehicle cost, about half. That can be more for models with longer ranges and greater power. They are also susceptible to minor damage.

That can cause safety concerns as even small dings to battery packs can destabilise cells, potentially causing fires and even explosions. A combination of high costs and volatile outcomes means many EVs are simply being written off for damage that traditional vehicles would survive.

Impact on Electric Vehicle Adoption

EVs are on the cusp of breaking even with traditional internal combustion engines, as cheaper running costs offset the higher upfront cost of the vehicle. However, higher insurance rates for EVs make them less attractive, which may lead to adjustments in adoption rates.

Are higher insurance rates for EVs a big concern for owners, or just a passing phase? The Lex team is interested in hearing more from readers. Please tell us what you think in the comments section below.

SDGs, Targets, and Indicators

1. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
   • Indicator 9.4.1: CO2 emission per unit of value added in manufacturing industries.

2. SDG 11: Sustainable Cities and Communities

   • Target 11.2: By 2030, provide access to safe, affordable, accessible, and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special attention to the needs of those in vulnerable situations, women, children, persons with disabilities, and older persons.
   • Indicator 11.2.1: Proportion of population that has convenient access to public transport, by sex, age, and persons with disabilities.

3. SDG 13: Climate Action

   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
   • Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning into primary, secondary, and tertiary curricula.

Analysis

The article discusses the rapid increase in auto insurance prices for electric vehicles (EVs) compared to fossil fuel cars. This issue is connected to several Sustainable Development Goals (SDGs) and their targets:

1. SDG 9: Industry, Innovation, and Infrastructure

The high insurance prices for EVs can be linked to Target 9.4, which aims to upgrade infrastructure and retrofit industries to make them sustainable. The increased costs of repairing EVs and the difficulty in sourcing spare parts and specialized technicians indicate a need for more sustainable and efficient processes in the EV industry.

2. SDG 11: Sustainable Cities and Communities

The issue of high insurance prices for EVs is also relevant to Target 11.2, which focuses on providing access to safe, affordable, accessible, and sustainable transport systems for all. The higher insurance costs may make EVs less affordable and accessible, potentially impacting the adoption rates of sustainable transport options.

3. SDG 13: Climate Action

Target 13.2, which aims to integrate climate change measures into national policies and planning, can also be connected to the issue of high insurance prices for EVs. As EVs play a crucial role in reducing greenhouse gas emissions, making them less attractive through higher insurance rates may hinder progress towards climate action goals.

The article does not explicitly mention any indicators related to these targets. However, the following indicators can be used to measure progress towards the identified targets:

• Indicator 9.4.1: CO2 emission per unit of value added in manufacturing industries can be used to assess the sustainability of EV production processes.
• Indicator 11.2.1: Proportion of the population that has convenient access to public transport, by sex, age, and persons with disabilities, can be used to evaluate the accessibility of sustainable transport options.
• Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning into primary, secondary, and tertiary curricula can be used to measure the integration of climate change measures into education systems.

Table: SDGs, Targets, and Indicators

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Source: ft.com

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