Lets start at the beginning, do all mainstream insurance companies insure electric cars?
The majority of mainstream insurance companies now insure electric cars. There were early reports of difficulties in the early days of electric motoring, firms like Aviva, LV, Direct Line and Admiral have all integrated EVs into their quotation systems.
This makes insuring an electric car as straightforward as insuring an ICE vehicle.(dinosaur fuelled)
There are a few manufacturers that will provide insurance packages as an option to customers, as with traditional ICE vehicles.
Does it cost more to insure an electric car?
As of September 2020 it does cost more to insure an electric car than an ICE vehicle.
The insurance industry generally applies a higher group rating to electric cars compared to traditional ICE vehicles, this is because repairs and parts for electric vehicles are currently more specialised and more expensive.
The lowest insurance group for a VW Golf is 7, compared to its electric equivalent VW e-Golf, which is insurance group 15.
When insurers looks at risks to insure and produce the quote they take a number of items into consideration, Car group rating, Driver age, Driver History, Area, Miles per year, Commuting vehicle etc.
In 2019 the UK market share for EVs was 1.3%, So far in 2020 they make up 5.4% of new car sales (1 in 20 cars !), this should in time allow insurance companies to level the costs associated with these new vehicles.
Why does it cost more to insure an electric car?
Electric cars are built very differently when compared to traditional ICE vehicles, they present some unique issues for insurers such as:
Costs of specialised parts.(Batteries from crash damage, electronic equipment, regenerative brakes)
Repairs by limited mechanics.
Electric car insurance policies are more expensive than ICE vehicle when compared like for like.
As more electric vehicles become available and with the government’s ban on new petrol and diesel cars coming into force in 2035, the cost of insurance will reduce and eventually become cheaper than their ICE counterparts.
Comparison site GoCompare warns that buyers can still expect to pay a premium, it says any gap is shrinking. “Insuring an electric car is likely to be more expensive than covering a standard vehicle,” a spokesman said. “Increasing numbers of insurers cover such vehicles, which should bring costs down, so shop around every year.
“When you search for a car policy, we compare multiple insurance brands, but it might be that only a handful offer cover for electric vehicles. That makes it even more important to compare electric car insurance policies to make sure that you’re getting the best possible deal from such a limited market.
“The good news is that green cars are becoming increasingly mainstream, meaning that more and more insurers are looking at providing policies. As the number of insurers goes up, the cost is likely to fall. With electric car insurance, it’s more important than ever that you don’t simply auto-renew at the end of a year.”