“If you replace a damaged battery with a new one, suddenly, once you add in the other costs in terms of labor and car rental,” says Mark Fry, technical director at Thatcham Research, “it doesn’t It’s just not always the case that it’s economical to repair the car.
A spokesperson for the Association of British Insurers adds that there are issues around the availability of repairers in the UK. The electric vehicle insurance market may be a little shaky right now. In September, major British retailer John Lewis was forced to stop insuring its electric vehicles altogether after its underwriter, Covéa, withdrew cover for the vehicles. A Covéa spokeswoman declined to specify why the company changed course.
Some U.S.-based insurance companies also exclude electric vehicles, says Tim Zawacki, an analyst at S&P Global Market Intelligence. He says the industry depends on real-world experience and at present this is still lacking.
Small numbers, big costs
Separately, a spokeswoman for Admiral, a major insurer in the United Kingdom, says battery problems can lead to write-offs. “With no ability to repair, recycle or reuse a battery, it will likely result in a total loss due to its high value,” she said, while declining to confirm whether electric vehicles were being taken out of service more frequently than ICE vehicles.
Christoph Lauterwasser of the Allianz Center for Technology, a German research institute owned by insurance giant Allianz, says damage to the underside of an electric vehicle may be more likely to lead to scratches on the battery case. “The problem is that in some cases this leads to a total replacement of the battery, which is quite expensive,” he explains.
According to Allianz, electric vehicle claims currently represent only 2% of the total volume of auto claims the company handles. However, they represent around 10 percent of the company’s costs.
In Western markets, at least, electric vehicles tend to contain on average a higher percentage of difficult-to-repair materials, like aluminum or composites. If these components are damaged in a collision, they will likely need to be replaced, says Ryan Mandell, claims manager at Mitchell, a U.S. collision repair specialist. This, and the lack of established repair procedures in general, increases overall insurance costs associated with electric vehicles compared to ICE vehicles. However, Mandell adds that the frequency of total EV write-offs does not, at this time, exceed that of comparable high-end ICE vehicles.