Believe it or not, electric vehicles have actually been around since the 1890´s, but it wasn’t until the start of this century that an alternative to the fuel powered car really made its entrance into the mass market and the electric car became a consumer reality. Nowadays, there are said to be around 20 million electric cars globally, and the figures are steadily rising.
So, if you are considering whether to jump on the electric bandwagon, it is useful to know more about the practical side of owning an electric car, including the specifics of car insurance for electric cars.
You may think that there would be no difference, after all, car insurance is car insurance, but as with everything in life, you should always go in with your eyes open when investing your hard-earned cash on a significant purchase like a new car.
Do I need a specialist company to provide insurance for an electric car?
There are some specialist providers in the market, but now that electric cars are becoming more and more popular, most existing insurance companies also offer their own adapted policies for electric cars.
For example Caser Expat Insurance offers competitive rates for your electric car, which cover all the same areas as you expect for a fuel-powered car, but also includes adapted and additional benefits, which are specifically designed with electric cars in mind. Their 24-hour Travel Assistance is similar to breakdown cover, but also means that if, heaven forbid, you have battery failure, you will be towed to the nearest charging point to get you back on your way as soon as possible.
Caser also offer a network of premium workshops, which appraise your electric car within 24 hours of entering the workshop, and you can choose from different levels of excess, depending on the type of electric car you have. Another major benefit is that they give up to 60% discount on insurance renewal if you haven’t had to make a claim.
For more great advice and further information about electric cars in general, check out the Caser magazine article about PHEV´s and charging know-how and costs (just available in Spanish, but with interesting info on it) or the Car Insurance FAQ page.
How is car insurance for electric cars calculated?
As with a normal car insurance policy, your policy will be based on the type of car, your age, occupation, claims history, annual mileage, where you live and where you keep your car overnight. It will also depend on the type of policy and the excess you choose from the available options.
The insurers weigh up the value of the car against these personal factors, to assess how much of a risk you are, and how likely it is you will need to make a claim. For example, if you have a high annual mileage, then more time on the road means you are more likely to have a collision so you pose more risk and will pay a higher premium. New drivers with less experience of hours behind the wheel are considered a higher risk than experienced drivers who have made minimal claims and have a good track record of a number of years driving.
You can find a useful page on the Confused.com website that summarises each area in more detail, so you can see how the different areas will affect your car insurance premium.
In addition, as with sourcing car insurance for traditional cars, you need to know some of the wording or abbreviations used in order to be able to get the right quote and cover.
Is your electric car an EV, PHEV or HEV?
- EV stands for Electric Vehicle – which means that the motor is totally electric, and it runs completely from battery, without the need for a petrol tank or combustible engine.
- PHEV stands for Plug-in Hybrid Electric Vehicle - which means that can be driven using either an electric motor or combustible engine/petrol tank.
- HEV stands for Hybrid Electric Vehicle - which means it uses a combination of an electric motor and combustible/fuel engine to power the car and its features.
Is car insurance for electric cars more expensive?
This is probably the most asked question, but we need to put this into context, while also considering some of the key points above regarding how insurers calculate your quote.
Premiums of car insurance for electric cars can be higher because:
- The actual value of the car is higher. The IDV (Insurance Declared Value) is the main thing that affects the quote, and so it makes sense that a newer, more expensive car which uses cutting edge technology will be more expensive to insure than an older traditional model. In the same way a Porsche obviously costs more to insure than a Peugeot, it is like comparing apples and oranges!
- Don’t lose faith though, because the fact that the car value is higher, and the electric car market is growing, means that the car should retain a high value and be worth more in part-exchange or re-sale value on the second-hand car market when you decide to upgrade in the future.
- The parts are more expensive to replace. If you consider that the lithium-ion battery is the most expensive part, and can account for around 50% of the cost of the car, it makes sense that replacing it incurs a high price, which is factored into the insurers quote to recover their losses on claims for replacements.
- However, as with all new things, initial prices are always higher, and as these cars become more popular the economies of scale should drive down the prices and insurance premiums in the long term.
- There are less electric car mechanics. Repairing damaged electric cars requires highly skilled technicians and mechanics, and as there are not as many at the moment, the labour costs covered by insurers can be higher as they need to employ mechanics from a more limited sector.
- This is a boom area for training courses, subsidies, and assistance to increase the talent pool available for this growing market, so as the numbers rise this will result in more competitive rates for sourcing mechanics who can provide the service at a more affordable rate.
Premiums of car insurance for electric cars can be lower because:
- Engine size/horsepower - If you opt for a fully electric car, or EV, then, due to the fact that their engines tend to be less powerful that combustible fuel engines, this can have a positive effect on your premium and bring the price down, or to the same as a normal car, despite the factors mentioned above. It is worth researching average insurance prices for different makes and models to get some benchmark figures for EV´s
- Going Green – you may find that some providers offer discounts or incentives for electric car insurance because it is more environmentally friendly and helps them maximise the CSR (corporate social responsibility) reputation of the company. This is becoming increasingly important for companies around the world, who want to show they are supporting the movement to combat climate change and have positive green policies for their customers and the planet.
There is no doubt that with the global target of Net Zero emissions by 2050, the electric car market, and provisions for required infrastructure such as charging points are going to be high on governmental agendas, with China, Europe and the US as the key players. Current estimates are that by 2030 there will be around 300 million electric cars on the planet.
So, if you haven’t already moved over to the green side, or even started looking at the options, it’s time to start doing some research, not just into the stats of the cars themselves, but also car insurance for electric cars news and options. Then, you won’t be left in the dark and can make an informed decision about the overall investment, including initial outlay and annual costs for when you are ready to flick the switch!
If you are searching for car insurance in Spain, Caser Expat Insurance has the right policy for you!