Electric Vehicles and Insurance: Here's What You Need to Know
Here’s what you need to know about electric vehicles and insurance: cover, costs, and claims, total costs and overall expenditure, battery and equipment cover, range anxiety cover, and add-ons.
The electric car market boomed in 2021 despite declining new vehicle registrations globally. According to a survey by Electrek, the United States electric car market has grown extensively.
For instance, in 2020, the United States generated four times as much electric energy from wind and solar than 10 years ago. This statistic is a clear indication of the rising reliance on clean energy, especially in powering automotives.
Electrek records show that the number of electric cars has skyrocketed from 16K to 2 million in just a span of ten years.
So, there's no denying that with the increase in electric cars, questions about EV car ownership will arise.
One such question is how car insurance for electric vehicles works.
Things to Know About Electric Vehicle Insurance!
Below we take a look at some of the things you need to know about electric car insurance:
1. Cover, costs, and claims
Most car insurers will provide comprehensive coverage for electric cars. From reputable names like Tesla and BMW, to smaller agencies specifically targeting aspiring EV owners, there are policies surrounding electric car ownership and financing everywhere.
So, insuring an electric vehicle is not different from insuring a diesel or a petrol car; the insurer will consider how likely you're to make a claim and how much the claims may cost before settling on a premium.
That means that the EV car insurer will look at the cost of the electric car and its insurance group (all cars belong to different insurance groups that rank from 1 to 50, where one is the least expensive and fifty the most expensive). Also, the insurer will look at the crime rate in your area, your claims, and your driving history before deciding on the final insurance settlement.
2. Costs and overall expenditure
Some quirks with electric cars make them relatively more expensive to insure than internal combustion engine (ICE) cars. For instance, the replacement parts used to power electric cars are considerably more costly to buy and maintain. The insurer will pass on this cost to you as higher premiums.
In addition, electric vehicles tend to range in higher and more expensive insurance groups than internal combustion engine cars of equivalent nature.
A car's insurance group will reflect three things – cost, quality, and security – and cars are rated on a scale of 1 to 50, with one being the cheapest and fifty the most expensive car insurance group.
For instance, the Nissan Leaf, an electric vehicle, is ranked in car insurance group 21, while Nissan Micra, an ICE equivalent, ranks at number 1. This disparity may highly affect what you'll pay as insurance premiums.
3. Battery and charging equipment cover
Another critical question you must consider when securing an EV car insurance is whether the battery or charging equipment is covered. Many EV car insurers will offer specific cover for your battery and charging apparatus whether you own them or not.
Some insurers like AA will even offer comprehensive insurance so that your charging cable is insured even if your neighbor was to trip over your property. That means you don't have to worry even when traveling on a trip away from home.
4. Range anxiety
Range anxiety refers to the concern that your EV battery may run flat when you're miles away from the nearest charging station. This concern has barred many potential buyers from purchasing electric vehicles.
One survey in the United States cited that 58% of respondents found range anxiety as a hindrance to buying an electric vehicle.
So, when securing EV insurance, remember that most insurers offer breakdown cover either as part of the insurance cover or as optional coverage so that the insurer will tow the car to the nearest charging station in case it stalls away from the nearest charging station or service center.
Some insurers will go a step further to maintain a fleet of recharging vans that provide mobile recharging across designated areas, including the emergency refuge and hard shoulder motorways.
This insurance ensures that any electric vehicle receives a 30-minute charge at the roadside sufficient to cover 10 miles for drivers to get to the nearest service station for a full recharge.
So, when looking to secure EV insurance, consider whether the insurance offers 'range anxiety' coverage either as part of the insurance or as an optional extra.
Getting the best deal from your EV car insurance
A car insurance comparison is the best way to go regardless of the type of fuel your car runs on. That means you should aim to leverage car insurance websites and conduct a comparative analysis to identify the best deals in electric car insurance.
Once you enter your EV registration number or the number of the vehicle you're thinking of buying, the car insurance comparison will generate information about the car, including whether the vehicle is a hybrid or electric.
What’s the ideal coverage?
The ideal coverage of an electric vehicle insurance cover is the comprehensive one that adequately covers all parts and accessories. It's critical to look at the existing add-ons. Add-ons are additional benefits provided in the insurance that you enjoy by paying an extra premium.
What about add-ons?
Take the following add-ons when considering an auto insurance plan:
- The comprehensive insurance must cover or offer protection against third-party liabilities and own damages. Own damage cover extends insurance against expensive repairs in case of fire, riots, accidents, and natural calamities.
- Zero depreciation cover is another add-on for electric vehicles. With a zero depreciation cover, the claim made regarding the depreciation is waived, and the total amount of the damage is paid.
- In addition, a personal accident cover will keep you financially secure and safe in case of an accident. This cover will insure total injuries, partial body injuries, accidents, or deaths.
- It's advisable to take an add-on cover or optional extra cover for accessories such as batteries, adaptors, and charging apparatus.
- It’s important to note that the premium for charging accessories and the battery differ from one insurer to another.
It's critical to remember that comprehensive insurance coverage is not mandatory for electric cars. However, it provides financial protection against liabilities such as accidents resulting in bodily harm and deaths.
When considering financing an electric vehicle, myAutoloan.com can help.