Are electric cars expensive to insure?
Electric cars tend to cost more to buy than conventional cars, but are they also more expensive to insure? We explain all here
Car insurance is an often-expensive fact of life for the UK motorist. If you drive a vehicle on public roads in this country, it has to be insured to at least cover third-party damage, and electric cars are no exception. There’s good reason for this, given that figures show 180,000 incidents a year on UK roads, ranging from small bumps to heavy collisions on motorways.
The good news is that insuring an electric car is no different to insuring any other car. Most mainstream cover providers now cater for electric cars, while there also dedicated electric-car insurers out there eager to take on your business.
Are electric cars more expensive to insure?
Electric cars can – in general – be more expensive to insure than an otherwise directly comparable petrol or diesel counterpart. In 2017, research by price-comparison website Comparethemarket found that some electric cars can cost as much as a 45% more to insure than their conventional counterparts.
The picture looks to be changing, however, with insurer LV releasing data in early 2021 to show that in some cases it’s cheaper to insure an electric model, and in other cases it can cost around 10% more. According to its data, a Renault ZOE is 8% cheaper to insure on average than a Renault Clio (£287 vs £311), whereas a Nissan Leaf is only 8% or £23 more expensive to cover than a Nissan Micra (£301 vs £278). Similarly, premiums for a Hyundai Kona (£299 electric vs £283 petrol) and Kia Niro (£307 electric vs £289 petrol) were found to be only 6% more than their combustion-engined equivalents.
According to Martin Smith, technical claims manager for insurance company Aviva, there is nothing about electric cars that makes the intrinsically more expensive to insure. At the end of the day, it's still a four-wheeled vehicle with a motor operated by a human driver – and it's that human driver's record and claims history, as well as other factors such as anticipated annual mileage, usage and location, that have the greatest bearing on the insurance premium you pay.
However, there are some aspects concerning the maintenance and repair of electric cars that can contribute to higher premiums found by Comparethemarket's 2017 research.
Why can electric cars be more expensive to insure?
While electric cars have fewer moving parts than petrols and diesels, some components like the lithium-ion batteries are very expensive to repair if damaged. Providers take this into account when calculating premiums.
Another less-discussed reason is the availability of staff to repair electric and hybrid cars. Previous research by our sister title Auto Express found that just a fraction of the UK’s mechanics are qualified to work on electric cars. In 2016, just 1,150 out of a total of 240,000 vehicle technicians were qualified to work on electric cars – with none working in independent garages or body shops.
Steve Nash, CEO of the Institute of the Motor Industry (IMI), has previously said that more than eight in 10 independent garages are struggling to recruit technicians qualified to work on electric cars and hybrids. He said: “This will mean that the market will fail to open up and develop to the benefit of the UK economy, and without competition in the marketplace, the UK customer will suffer higher pricing.”
However, insurance premiums for electric cars will gradually come down. As manufacturers find new ways to cut production costs, and as the number of qualified electric and hybrid technicians increases, electric-car drivers should enjoy cheaper premiums in future. The situation has improved somewhat since the above-mentioned 2016 survey; as our guide to electric car repairs and maintenance details, you can now use the Hybrid and Electric Vehicle Repairers Alliance (HEVRA) website to search for an electric-qualified mechanic local to you.
According to Aviva's Martin Smith, as the technology and skills needed to repair electric cars become more widespread, the effect of these factors on electric-car insurance will flatten out. "Essentially, there’s nothing unique to electric cars that makes them more expensive to insure," he says. "They’re like any other car. If it’s very expensive or has a lot of technology, those are things that can contribute to a higher premium."
What you need to tell your insurer if you own an electric car
There are a couple of things you should let the insurer know before purchasing the policy. The most important is whether you have a battery lease on the car or not. If you're leasing the battery separately, you need to let your provider know to prevent any issues should you have to make a claim.
It's worth mentioning, though, that battery leasing is becoming increasingly rare these days, as early concerns about the long-term life of electric-car batteries have largely been allayed, but you may have to bear it in mind if you've bought an older electric car secondhand. Another point to consider is where you'll charge the car. If you're charging it regularly at home, but have the charging cord lying on a public footpath, you have a duty of care to members of the public to prevent them tripping and hurting themselves on the cord.
You don't necessarily need a specialist electric-car insurance policy to take account of these factors, however. As Aviva's Martin Smith says: "An electric-vehicle policy will probably cover you for a trip event, but your standard motor policy will provide that cover, too."
How can I bring my electric-car insurance premium down?
There are several ways to lower your premium on an electric car. The first is by shopping around for the best deal. Comparison sites are a good start, but not all insurers – especially specialist providers – are listed. This is why it's also worth considering using an insurance broker.
Paying your premium all at once will work out cheaper than going for monthly instalments, as these often include interest charges. You should also consider installing a black box, or a telematics device, in your car. These monitor driving behaviour such as how fast you’re going, whether you’re braking and accelerating aggressively and your corner speeds. Good behaviour is rewarded with cheaper premiums, with drivers able to save up to 20% compared to normal policies.
Finally, you could consider a dash cam. These are small cameras that sit on the dashboard, continuously recording what's happening in front of the car. If a crash were to occur, this could prove crucial in proving who was to blame and whether or not your insurer will pay out. Some providers offer discounts up to 20% for dash-cam users, but make sure to contact your provider and ask them if they offer any discounts for a dash cam before shelling out for one.
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