Insuring an electric car

Insuring an electric car

Electric-powered cars are rapidly becoming much more popular, with vehicle registrations increasing 32% in the last year. In fact, Volvo recently announced all cars rolling off its production line will be electric in just two years-time. Other major manufacturers think they’ll follow suit some time during the 2020s, especially as France and the UK have announced a ban on the sale of new petrol and diesel cars by 2040.

There are plenty of advantages to owning an electric car, not least possible zero road tax payments, much lower cost-per-mile energy usage and far fewer garage bills.

But what about insurance? Car cover is a pricey part of owning a ‘normal’ car, but what about electric vehicles? Do you get the same benefits? Is it more, or less expensive? Here are some of the key things to consider.

Electric vehicles cost more to insure

Cost is the main factor for most drivers when buying car insurance. In general, electric car insurance provides pretty much the same cover as for standard petrol or diesel driven vehicles, but, on average, it’s more expensive.

One insurance comparison site recently put the difference at an average of £330. The greater cost is likely to remain the case until production of electric cars hits volumes that bring down manufacturing and distribution costs.

There are a number of reasons for the higher prices motorists generally pay:

  1. Price of parts – As electric vehicles aren’t expected to reach mass-production levels for quite a few years, the price for fixing them is relatively expensive (however, electric cars have far fewer moving parts, meaning a lower likelihood of repairs being needed).
  2. Batteries – The cost of replacing electric car batteries is currently very expensive. In the second-hand market, the battery will often cost more to replace than the value of the car. Some electric vehicles offer battery-leases in return for a new battery at the end of the contract. You need to tell your insurer if the battery is leased as some won’t cover this as it can cause complications when it comes to claiming on cover.
  3. Power cables – Unless you have off-road parking, you’ll probably need to run a cable across a pavement or other public-use area. This is seen as a trip hazard by insurers, with the higher potential for third-party injury claims it brings.
  4. Car prices – Electric cars are, at present, more expensive to buy than similar diesel and petrol cars. Again, this inevitably means that it impacts on the price of insurance as insurers have to pay out more if the vehicle is written off or stolen.
  5. Insurance categories – For all of the above reasons, you’ll find that, on the whole, electric cars are placed in more expensive insurance categories than their petrol and diesel-powered equivalents.

Always shop around

Although insuring an electric car is usually more expensive, if you shop around and haggle hard (as you always should), you might pay less than a mate who is a bit lazy and doesn’t do any leg work for a similar petrol or diesel vehicle!

 

Policy Expert

The customer service team at Policy Expert is always on hand to help – either online or over the phone. Whether you want assistance in finding the right policy or even handling a claim, we make sure it’s all handled by experts. For more information on what‘s covered under your Car Insurance policy, you can call our experts on 0330 0600 600 or visit www.policyexpert.co.uk/contact for more ways to reach us.

 

Published 16 August 2017


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