Tag Archives: insurance bills

Electric cars risk becoming uninsurable

Electric cars risk becoming effectively uninsurable due to costs involved in repairing their batteries, industry experts have warned.

From Tallbloke’s Talkshop

 October 22, 2023 by oldbrew

Over-sensitive and unpredictable lithium-based batteries continue to be a headache, for various reasons. Is the EV industry really ready for prime time, as government ‘net zero’ mandates take hold?
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Electric cars risk becoming effectively uninsurable as analysts struggle to put a price on battery repairs, the researcher for the car insurance industry has said. — The Telegraph reporting.

Jonathan Hewett, chief executive of Thatcham Research, the motor insurers’ automotive research centre, said a lack of “insight and understanding” about the cost of repairing damaged electric car batteries was pushing up premiums and resulting in some providers declining to provide cover altogether.

Electric cars can be particularly expensive to repair, costing around a quarter more to fix on average than a petrol or diesel vehicle.

Experts have previously warned electric vehicles are being written off after minor bumps because of the cost and complexity of fixing their batteries.

Mr Hewett said: “The challenge is that we have no way of understanding whether the battery has been compromised or damaged in any way.

“The threat of thermal runaway means that a catastrophic fire can take place if the cells of the battery have been damaged in a collision.

“What we’re struggling to understand at the moment is how we approach that diagnostic technique.

“It’s like a doctor trying to understand what’s wrong with you without any notes or an X-ray.”
. . .
Mr Hewett said premiums would eventually begin to level out and match those of petrol and diesel cars once actuaries had the tools needed to better understand the risks of insuring electric cars, saying the issue would likely be “short term”.

However, he added: “The battery is an extremely expensive component of an electric vehicle and until we find efficient ways of dealing with it we have the challenge of high premiums for electric vehicles, which nobody wants.”

Some customers are now being quoted over £100 a week to insure their electric vehicles, with others reporting premiums doubling or tripling compared to a year before.

Full report here.

EV’s suddenly become uninsurable (unless you are rich)

From JoNova

By Jo Nova

Shuets Udono

Remember how we predicted insurance costs would rise when people realized that almost brand spanking new EV’s were being written off for scratches, because no one could test their battery and be sure it would not ignite? And then there was the news that after an accident, electric cars need to social distance, taking up as much as 50 times as much parking space, in case they blow other cars up? Well, insurance companies have realized this too. One underwriter has paused offering EV’s insurance entirely, while other companies are ramping up the rates by 60 – 900%. What a shock:

‘The quotes were £5,000 or more’: electric vehicle owners face soaring insurance costs

Zoe Wood, The Guardian

In the Facebook group, members share stories of horror renewal quotes, with increases ranging from 60% (up to £1,100) to a staggering 940% (a jump from £447 to £4,661, according to a screengrab shared by one driver).

“I spent weeks on every comparison site as well as trying individual insurers and specialist brokers, but either they wouldn’t cover the car or the quotes were £5,000 or more,” says David, whose only change in circumstance was three points on a licence.

Privilege, Vitality, Axa and the specialist broker Adrian Flux were among the brands he found were “unable to insure him at this time” before he nailed down a policy with Direct Line, albeit at a price.

Analysts say claims costs are 25% higher for electric cars, and that they also take about 14% longer to repair than a diesel or petrol equivalent.

One former BBC reporter Alex Gerlis bought an EV, insured it with John Lewis, only to find after a year John Lewis said it had stopped insuring EV’s altogether. Gerlis thought this “flew in the face” of the company saying it wanted to fight climate change and complained. This may have been the first time he realized that not everyone who “wants to fight climate change” is happy to lose their money on it.

If you own an EV and it is insured, you might be lucky if someone were to run into it in the car park.

h/t NetZeroWatch

Damaged electric cars ‘quarantined’ over fears they will explode

From NOT A LOT OF PEOPLE KNOW THAT

By Paul Homewood

h/t Philip Bratby

Electric cars that sustain minor bumps are being kept 15 meters apart in repair yards over fears they might explode, adding to insurance bills.

Government guidelines recommend electric vehicles with damaged batteries should be “quarantined” from other vehicles due to the risk of battery fires. Damaged batteries pose a risk of “thermal runaway” where the energy stored in the battery releases rapidly, creating temperatures of up to 400C.

But the practice threatens to increase costs for the insurance industry by more than £600m, costs which ultimately could be passed onto drivers in increased premiums, according to a report by automotive risk firm Thatcham Research.

It said insurers would need to spend an additional £900m a year on quarantine facilities for damaged cars as a result of the safety measures by 2035, as more battery-powered vehicles take to the roads. The extra costs risk adding £20 a year onto all car insurance premiums, rising to £28 by 2050 when there are expected to be some 360,000 electric cars on the road network.

Just two damaged electric cars can fit into the same space that would otherwise fit 100 petrol or diesel cars, under current the DVLA and Transport Department guidelines.

Last year 9,400 vehicles were potentially involved in collisions resulting in batteries needing repair – a figure that could reach as high as 260,000 by 2035, the report said.

Claims for damaged electric cars cost insurers 25pc more than their petrol counterparts, the report found. Electric vehicles also take 14pc longer to repair.

Rapidly depreciating values mean the cost of replacing a battery outweighs the cost of the car after just one year, leaving insurers no choice but to scrap the car, it said.

https://www.telegraph.co.uk/insurance/car/damaged-electric-cars-quarantined-fears-explode/

Don’t worry though, because Sir Humphrey has got it all in hand:

A spokesman for the Department for Energy Security and Net Zero said: “We are investing in innovation and research, as well as working with insurers and manufacturers to further improve the ways electric vehicle batteries can be repaired, refurbished and recycled.”

Meanwhile the useless SMMT think that a VAT cut on public chargers will see millions flocking to by the equally useless EVS:

The Society of Motor Manufacturers and Traders (SMMT), which represents car makers, called for a tax cut on public charging stations to help accelerate the update of eco-friendly vehicles.

Drivers with chargers on their driveways pay just 5pc VAT to power up their electric car, while those reliant on the public network pay 20pc.

The SMMT said levelling out this disparity could make electric car ownership a more realistic target for people, regardless of their home ownership or property status.

Mike Hawes, SMMT chief executive, said: “Most electric vehicle owners enjoy the convenience and cost saving of charging at home but those that do not have a driveway or designated parking space must pay four times as much in tax for the same amount of energy.

“This is unfair and risks delaying greater uptake, so cutting VAT on public EV charging will help make owning an EV fairer and attractive to even more people.”

Does he really believe that a saving of a couple of quid a time will make the slightest difference to drivers who will face queuing up for hours at a charger?

Should not the SMMT be sticking up for the interest of motor manufacturers and their customers, and not promoting the government’s green agenda?