ROME – Not only the purchase price, but also the repair price of an electric car in the event of an accident is higher than that of a combustion car. And that leads to a higher insurance premium.
But what are the evaluation criteria that affect the different cost of repairing electric vehicle claims? And what is their impact on claims and insurance premiums? To analyze the problem, the UK government has funded a study, which will last a few months, led by the research institute Thatcham Research, which will draw on real-world claims data through collaboration with LV= General Insurance, one of the largest insurers of electric cars in the UK which is part of the Allianz Group.
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In the first phase, the project will focus on identifying what differentiates the claims workflow for electric vehicles, revealing potential weaknesses. According to a study conducted by CCC Intelligent Solutions, the average repair cost for a small electric city car, in the event of a frontal impact, is 26.6% higher than for an equivalent combustion car. And the differential increases to 53.3% when a luxury SUV is involved. Above all, the higher costs of spare parts have an impact, linked to the greater use in electric vehicles of more expensive lightweight materials, such as aluminum and carbon fiber, as well as to their particular design. In fact, if the fewer moving parts in an electric car can reduce the ordinary costs of assistance and maintenance, this also means that electric cars have components that are more integrated and more connected to the sensors, which makes their replacement more expensive and longer. On average electric and hybrid vehicles take 1.5 days longer to be repaired in bodyshops than their petrol and diesel equivalents.
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The increase in the cost of claims is also driven by higher labor rates due to the need to employ trained personnel to repair electric vehicles. And charging also involves assessing new risks, such as third-party liability if someone trips over a cable and is injured while a vehicle is plugged in, or additional insurance coverage for charging cables, connectors and electrical wall boxes. But what makes the insurance premium rise the most is the preventive amortization of the high risk that the insurers assume in the event the damage requires the replacement of the batteries. Which, as we know, correspond to around 40% of the value of an electric car.
For this – said the head of networks and engineering at LV, Chris Payne – ”the insurance sector must find the best way to repair electric vehicles and their batteries. This will not only have a positive impact on claims costs, but will also fuel a healthy second-hand electric vehicle market” and have an undeniable impact on the environment. Not surprisingly, the vehicle recovery and recycling company SYNETIQ will also be involved in the British government-funded project, which will focus on opportunities to re-use as many crash-damaged vehicles as possible, with a particular focus on finding a second life for their batteries.