What is Electric Car Insurance?

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With the exception of those much-loved old milk floats, electric cars and vans were for a long time the preserve of eccentrics and scientists in labs.

In fact, they have a long pedigree going back over a century but until fairly recently, technical challenges relating to the power system (battery) meant that they were still largely unknown on our roads.

Changes

That though has changed. Today, viable family vehicles that are entirely electrically-driven are appearing in increasing numbers. They offer impressive performance, they’re attractive-looking and above all, they’re very ‘green’ when compared to conventional combustion engine vehicles.

They also offer real economies and at the present time, there are still plenty of incentives to use them – such as their zero rate road tax (but remember – you still need to apply for and obtain that tax disc even if it costs you nothing).

While they’re different in most respects, they are still road vehicles and as a result, they need to be insured when in use on the public highway.

This is where things can get a little complicated.

Electric cars and insurance

While the technology has moved quickly, it probably has to be acknowledged that overall, the electric car insurance industry hasn’t.

Insurers usually price their policies based upon risk assessment and that’s constructed using lots of historical accident data.  No prizes for guessing that with electric cars, that rich repository of historic data just doesn’t exist yet.

This has caught some major insurance providers rather by surprise and as a result, the market availability of electric car insurance can be surprisingly patchy.  At the time of writing, it is still largely the domain of specialist providers with many traditional insurers either not offering such cover, as they try to construct suitable product offerings or in other cases, proposing some fairly hefty premiums indicating that they’re not yet sure they understand the market.

However, electric car insurance is available from specialist providers though prices vary considerably and it’s worth using someone who knows what they’re talking about.

Characteristics of electric car policies

While nobody outside of the industry would normally do so, it’s worth trying to be a little sympathetic towards the insurers and the nature of electric vehicles.

Some electric car buyers have leapt enthusiastically into the domain due to environmental concerns and that’s to be lauded. It’s also true that government is trying to help too by offering various incentives such as those mentioned above in the taxation arena.

However, we all need to keep in mind that electric cars are very similar to conventional vehicles from an insurance viewpoint:

  • they’re expensive items and will require a large cheque to be written out by the insurers in the event they’re damaged or stolen;
  • they are perfectly capable of creating accidents and causing third party injuries in accidents.

This means that the expectations of some owners that their electric vehicle will benefit from very low insurance costs may be unrealistic.  If you hit another vehicle in your electric car, the other owner concerned is unlikely to waive his or her claim simply because they admire your choice of car.

The insurance industry needs to recognise that. So, while going to a specialist insurance provider makes sense, so does being realistic about your final premium.

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