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Why are electric cars more expensive to insure?

It's true that electric cars can be very cheap to run, and they fall into cheaper road tax brackets. However, they generally cost more to insure. Here is why:

  • They cost more to buy, and so more to replace, than the equivalent conventional cars.
    Assembling internal combustioned engined cars has evolved into a very efficient operation with car companies buying components from a relatively small number of specialist manufacturers who are able to benefit from the economies of scale.

    With about 70 million petrol/diesel cars built last year price competition is cutthroat with car makers always looking for the lowest possible prices for the hundreds of different components they need.

    Over a million electric cars were sold last year which is a lot of cars but still less than 2% of the total number of cars built. The makers of these cars use a lot of components that just aren't available elsewhere so they have to make them themselves or buy them from specialist manufacturers in relatively small quantities. The economies of scale just aren't there.

  • They cost more to repair
    Electric cars can be very complex to fix if they get damaged. Spare parts are pricy and often very difficult to get hold of, which causes delays which push up costs for insurers, who may have to pay for storage costs as well as costly car hire whilst damaged cars are sat in repair shops. Also, since there are so few of them on the road yet, many car repair companies have seen no economic justification to spending the time and money training staff to fix them, so those with the necessary skills can charge high prices for their labour.

  • They are still very much an unknown quantity.
    Electric vehicles tend to have more safety related technology in them than conventional cars and so can be safer for the occupants in the event of a crash. However, insurers have masses of statistical data about conventional cars and car manufactuers such as their safety records and repair or replacement costs. Electric cars don't have a track record yet. To be blunt there haven't been enough serious accidents for statistics to be compiled and there are many unknown factors. What happens for instance if one sets on fire and efforts to extinugish it result on a short circuit of highly charged batteries? Will the relative silence of their approach cause more accidents involving pedestrians who never heard them? What risks do rescue workers, repairers or even members of the public doing DIY work on their cars face from the up to 650 volts DC current that some electric cars run on and which can be lethal if touched?

  • They can generate high magnetic fields
    These may affect devices such as heart pacemakers and although most medical experts believe that exposure to these are probably harmless there are those who doubt the wisdom of this.

  • They have a far lower range than internal combusion engined cars.
    Until the number of charging points increase and battery technology improves the possibility of an electric car running out of power at the wrong time raises a higher than average risk of cars being left by the roadside where they are more exposed to damage or vandalism.

In short, electric cars may eventually prove to be safer than petrol driven vehicles on the road, and as their numbers increase economies of scale may reduce repair costs considerably but at the moment insurers are wary of them and so charge more to cover them.

For more information about sensible safety precautions with electric cars please visit this UK government site.

So how do I get cheaper car insurance for my electric car?

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