Motor Insurers 'Boost Competition as Electric Vehicles Go Mainstream'
Its data shows 11 new insurance products began quoting for EVs on a major price comparison website last year with just three to four for petrol, diesel, or hybrid vehicles. Insurers are launching tailored policies with features like charging equipment protection, EV breakdown support, and even carbon offsetting.
The industry is responding to market changes – Society of Motor Manufacturers and Traders data shows new BEV sales rose 35.2% in the first four months of this year compared with the same period last year. Petrol sales dropped 10% and diesel 13.2%.
Premiums are falling after sharp rises in 2023 as the expansion in repair networks drive improvements in turnround times and richer claims data is helping insurers to improve pricing. Risk profiles of electric vehicle drivers are now more like petrol and diesel customers.
Some EV insurers have slashed premiums by as much as 18% and one insurer recently increased its EV quotability – the frequency at which it quotes – by 40 percentage points and gained an increase of 12% in its share of the top five quote positions.
EV premiums remain relatively high as despite them being involved in fewer incidents generally, the claims tend to be more expensive due to the need for specialist repairs and battery complexity. Location remains an issue with prices higher in the South East in April than in the North West due to differences in traffic congestion, theft and claims rates.
Ian Hughes, chief executive of Consumer Intelligence, said:
'As BEVs become more mainstream, insurers are no longer treating them as niche risks. That's creating space for more confident, competitive pricing.
'While electric vehicle sales remain just short of the government's Zero Emission Vehicle mandate target of 22%, the trajectory is unmistakable, the shift is accelerating and insurers are responding.'
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