22 Feb 2024

Impact of electric cars on insurance costs for drivers examined

The cost of running a battery electric vehicles (BEV) is likely to climb as a result of the impact of regulations surrounding the vehicles along with ongoing skills shortages, a new study from Thatcham Research has suggested.

With accident-damaged BEVs already required to be isolated in an exterior quarantine area for 48 hours 15 metres from other objects, the new report, Impact of BEV Adoption on the Repair and Insurance Sectors, covers other ways the sector will need to adapt to EVs, and the likely cost.

Funded by government agency Innovate UK, the report shows BEV insurance claims are 25.5% higher than with internal combustion engine vehicles, taking 14% longer to repair. The biggest issues centre on high voltage (HV) battery damage claims. BEVs with single-zone body damage have an HV battery damage probability of 1.5% -7.5%. BEVs bearing multiple zone damage have 25% – 35% HV battery damage probability. Underside damage was considered to signify an 85% chance of HV battery damage.

Thatcham Research‘s report also shows that vehicle damage assessors (VDAs) lack both the tools and techniques to properly assess HV battery damage, and at present there is also little salvage value in a written-off BEV. This is in the context of the HV battery making up a major chunk of the original vehicle value, often costing between £14,200 and £29,500. All of this will add to insurance costs for drivers.

A spokesman for Thatcham Research said: “The major takeaway from the report is that no part of the Motor Insurance Claims process is unaffected by BEVs. The implications still need to be quantified on repair capacity, training and skills, cost, and the lifetime sustainability of BEVs. Additional investment in further research is needed to identify technical solutions and practical interventions to support accelerating those solutions.”

To read the report, visit: www.thatcham.org/wp-content/uploads/2023/07/Impact-of-BEV-Adoption-on-the-Repair-and-Insurance-Sectors-report-Innovate-UK-and-Thatcham-Research-FINAL.pdf