Insurance Companies reviewing the cost to insure an EV

[desoto1939]

Insurance companies realize that EV’s Things could soon get Expensive

Some Insurance companies are getting concerned because of the rising cost for Electric Vehicles as compared to Gasoline powered vehicles.

Insurers are finding that the costs a car owners faces are higher for EVs that for gas cars. According to the a publishes report by Market watch right at the outset that insurance prices for EV’s are higher than gor gas cars.  So the higher the initial cost the more it costs to insurer a car. The average price for an EV reached $58940.  This is more than $10000 higher than the industry average cost of a new vehicle at the same time was $48000.

Also the coverage for an EV are anywhere from 10-135% higher than the national average depending on which EV you want to insure. Another big factor is also the cost for repairs on an EV. Even though there are fewer parts on an EV, the replacement parts are much more expensive. Example, if a battery pack is damaged they found that the average cost to replace an EV battery ranges from $4500-$18000.

 

There also is as shortage of qualified repair shops and qualified technicians, so higher costs passed onto the customers and insurance companies. EV repair costs are double or more than for gas powered or hybrid vehicles.

Note even FORD was forced to push back its expectations as Americans have proven slower to adopt EVs than the industry expected.

A customer of a Rivian truck was rearended and he was told the cost to repair the vehicle would be an eye-popping $42000 or about half the cost of the truck in the first place.  So some insurance companies when they have to pay a claim because of the costs are being forced to call the whole thing a total loss.

So when the battery pack is slightly damaged the insurance companies are forced to write-off the car even with low mileage on the car leading to higher premiums and undercutting gains from going electric.

 

So with all of the above statements always contact your insurance provider to get the total cost of car insurance for an EV replacement versus a gas powered vehicle.

 

Rich Hartung

 

 

 

Rich Hartung

Desoto1939@aol.com

 

[Bryan G]

Speaking as someone in the business, the challenges are real. There are multiple facets to the problem. Some considerations:

1) Tesla started off on, what I feel, was the wrong foot. They set up a network of authorized body repair shops, and it cost a bundle to get on the program. Shops were promised they could make that money back because they could charge insurance companies a lot more. That hasn't totally worked out for them, but did create major conflict. Non-authorized shops don't get any discount off list prices for parts, and Tesla won't deliver them. (Shops have to go to the nearest Tesla location.) They can't buy some parts at all. 

2) I was hoping Rivian, and some of these other start-ups, would follow a different path but that doesn't seem to be what they're doing. 

3) There isn't all that much unique about the construction of any of these vehicles, at least compared to the modern competition. But the newer companies didn't put a lot of effort into making them easily repairable. 

4) That $42k Rivian repair is very interesting. I read the story and there are two sides to that coin. Much of the blame can be placed on the shop, which is extremely aggressive and is basically "anti-insurance company." Their actions bordered on fraud, and were at least tainted with some incompetence. I believe that repair could have been performed correctly for about a quarter of what the customer was charged.

5) Even the simplest gasoline powered car on the market today is an electronic marvel, loaded with all sorts of amazing technology. A parking lot fender-bender can mean over $2000 just for calibrations. I see it all the time. These are expenses which didn't exist just a few years ago. 

6) Inflation. Parts prices and labor rates have skyrocketed, and insurance premiums have been slow to catch up. There's a lot of pressure right now to hold the line on costs.

[Ulu]

If you look at the $$,$$$,$$$ losses due to the recent fire aboard the car freighter Fremantle Highway, You can be sure that insurance and transportation costs will increase as well.

 

Because one lithium car fire could not be extinguished, about 3500 cars and the entire ship will need to be scrapped. They’re towing it to a special shipyard for disposal of toxic and contaminated salvage.

 

In addition, the ship burned for over five days on the North Sea, sending clouds of toxic pollution into the atmosphere.

 

Insurers, and thus Electric car buyers, are going to be picking up the cost of this pollution in the future. Instead of getting more affordable, electric vehicles will be increasingly more expensive, as people figure out the true cost of their life cycle.

 

 

 

 

Edited August 8, 2023 by Ulu

[P15-D24]

I was curious both this issue especially since on many new vehicles the battery packs are considered a "structural part"of the "frame". Does a hard rear end accident that damages the battery pack/container end up being a total loss?  The Tesla fan boys keep harping about the giga press and how the rear half of the vehicle is basically one casting. If it gets damaged in an accident how is it repaired or another total loss?  Lots of unanswered questions about repairs and if the the majority of accidents other than a fender bender end up being a total loss insurance rate will explode. 

[plymouthcranbrook]

While intellectually interesting especially after read this I am glad that it is one subject I will never have to personally deal with.

[Curt Lee]

Wondering about the liability impact of those vehicles under suspicion of going up in flames for no apparent reason. Homeowner's insurance carriers are very critical of high-risk vehicles in attached garages.... I in no way mean to cast aspersion against EV's, just making a note. Regular ICE vehicles burn, too.