Electric Vehicles (EV) are an emerging issue for the insurance industry. These vehicles are powered by batteries and electric motors rather than gasoline and internal combustion engines. While these vehicles can serve environmental and fuel efficiency benefits, they also present specific concerns and hazards when it comes to insurance claims.
Characteristics of EV’s that pose as insurance risks:
Personal Use & Ownership
These vehicles have a high likelihood of personal usage cars and are often titled in an individual’s name. Business ownership and business usage of the vehicle should be confirmed if the auto will be going on a business auto policy.
High Cost New
EVs are generally more expensive than gasoline-based vehicles.
Fire Severity
EVs are powered by Lithium-Ion batteries, which when ignited, can potentially turn into unmanageable fires due to a condition called Thermal Runaway. While fires are not more common in EVs than they are in gasoline vehicles, the damage from a fire is often more severe in an EV.
Weight
EVs tend to weigh significantly more than gasoline vehicles, which can contribute to the severity of damage in an auto accident.
Use & Misuse of Self-Driving Features
Newer EVs may have driver assistance features designed to reduce accident frequency, including self-driving. While drivers are intended to pay attention and remain with their hands on the wheel when using self-driving features, many drivers pay much less attention to driving the vehicle.
Because of this misunderstanding of the “autopilot” technology and resulting accidents, many insurance companies are unwilling to insure high end EVs with this feature currently.
Inexperienced Shops & Lack of Parts Network
Tesla remains the best-selling EV manufacturer, but as more manufacturers make different variations of EVs, it can become difficult for insureds to obtain repairs and parts for their specific vehicle in a cost-effective manner. The few shops qualified to repair these vehicles charge higher prices, tracking down parts can take longer, and rental car usage often goes longer than what the insurance policy will cover.
Many insurance companies will not cover the fees of renting a car longer than the standard number of days outlined in the policy, and insureds may be expected to bear additional costs themselves.
Avery Hall is here to help.
As your Avery Hall agent, we strive to serve as a resource for the latest in insurance industry news, and this includes sharing information on assets that may be more difficult to find coverage for. We have access to a wide variety of quality insurance carriers and are ready to help you find coverage for your vehicle.
Contact us today at 410-742-5111 or request a free quote at averyhall.com.