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Examining the challenge of the rising cost of insurance and the impact on EV uptake  

Transport + Energy recently posted a quote from the Insurance Industry on Linkedin that ‘Insurance claim rates are “key” to controlling EV premiums’.

This appears to be a very obvious comment considering that consumers and business owners do their utmost to control their policies, as they know that if they make a claim their premium will increase upon renewal.

The insurance industry in the UK is long overdue for a complete overhaul, it is an industry that is reactive rather than proactive, and is quite happy to rely on the status quo.

This is very similar to the traditional automotive industry, which is now on the verge of being overtaken by the Chinese OEMs entering the UK market.

The background of the automotive insurance industry

The Insurance Industry appears to take direct aim at EV’s being responsible for the rise in cost of premiums, citing EV repairs being more expensive than traditional ICE cars.

Yet the facts highlight the following attributes lead to more claims than the number of accidents and damage involving EVs, such as:

    • The theft of ICE cars (particularly Range Rovers)
    • Young drivers involved in accidents
    • Expensive parts such as catalytic converters being stolen by thieves

As a direct result of these mis-aligned reports of EVs being expensive to repair, the scaremongering is leading to consumers being further led astray by traditional car dealers who push ICE car sales rather than highlighting the benefits of zero emission electric cars.

This will partly be addressed by the Chinese OEMs who will bring lower priced EVs to the market which will be in direct price comparisons to ICE models hence, making the ownership of EVs much cheaper than ICE cars.

Meanwhile, the insurance industry must go back to the start to reimagine the future with fresh thinking to align its offering with today’s consumers and their requirements.

Flexibility is the key, they need to step into the present to get into a world where consumer requirements, digital operation, speed of action, and flexibility are all entwined with being proactive in an ever changing industry.

What is increasing insurance costs?

One of the biggest drain on resources and hence the root cause of the policy cost can be attributed to the time it takes for insurance companies to settle claims.

This has been a problem for insurers, and indeed consumers, for some time, since many claims rely on circumstantial evidence and witness accounts.

But how can this be remedied with EVs?

We believe there are several ways this can mitigated by the increase of EVs on our roads for several reasons:

  • The use of OEM vehicle data and after-market telematics – this can help to determine accident fault and would decrease the time taken to settle claims.
  • On Street Connected Data centres – the UK has one the world’s best surveillance systems and is connected in every way, from traffic light automation to CCTV on virtually every corner.
  • First Notice of Incident/Accident reporting – this could be stipulated in the policy and failure to report with a given time would lead to failure of the claim.

The above would allow the insurance industry to move into the 21st Century and be in the same space as today’s consumers and businesses.

What is being done about EV uptake?

All of the above can be tied into the Environment and Climate Change Committee paper issued recently House of Lords – EV strategy: rapid recharge needed – Environment and Climate Change Committee (

This lengthy paper highlights that the progress is not happening fast enough in part due to the misinformation in the market about EVs and the anxiety that consumers face as a result of unfounded concerns about safety, reliability and affordability.

The committee has called for the Government to do more and do so quickly, which puts the onus back on the Private Sector, one of which is the Insurance Industry who should take the bull by the horns and push forward with decisive action.

The first move should be to digitise the insurance policy allowing customers to report accidents via their mobile phones, to allow every policy to have a digital link that the customer could have in their phone as a contact allowing them to call, and text or email send images of an accident.

This one action alone would have a tremendous effect for the insurance sector as would have a chain reaction as follows:

  • Make the customer interactive in the accident claim process rather than being a by-stander and completing endless forms and statements
  • It would speed up the process for claims for the insurer
  • Reduce the time to settle claims
  • Reduce the cost of premiums
  • Improve customer satisfaction levels

At EZOO, we deal with all of the car subscription insurance to ensure the customer doesn’t need to deal with the hassle that comes with it.

If you’re interested in learning more about our electric car range, or anything we’ve covered in this piece, you can get in touch with us by dropping us an email at [email protected], or giving us a call on 0845 833 3200.