Electric Car Insurance Explained

What is Electric Car Insurance?

Electric car insurance refers to any car insurance policy that covers electric cars.

While coverage is structured in more or less the same way as insurance for petrol and diesel cars, the policies do have certain nuances specific to EVs, and are calculated with consideration to things such as the car’s charging needs, specialist parts, and other factors.

Though the policy price will depend on your specific vehicle, your history as a driver, and other variables, EV insurance can often be more expensive compared to ICE (Internal Combustion Engine) vehicles of a comparable value, due to the unique components and maintenance needs that petrol or diesel cars don’t have.

How Does EV Insurance Work?

Aside from the additional need to cover your battery, charging cables, and other components, electric car insurance works in basically the same way as insuring a traditional petrol or diesel car.

After sharing some key details about your car and driving history, an insurer will be able to provide a quote for a policy to insure your car, based on variables such as:

• The vehicle’s list price

• The potential cost to repair your EV in the event of accidents 

• The cost of parts for your EV model

• The size of your EV’s battery

• Any additional technological features that might affect the cost of repairing your EV

Key Differences Between EV and Standard Car Insurance

When you’re first switching to an EV from a standard ICE vehicle, there are a few key differences you’ll need to consider in order to budget for the policy quotes you’ll receive.

Here’s a closer look at two of the key distinctions affecting the way your electric car insurance will be calculated.

EV-Specific Components Covered

One of the biggest differences between insuring an EV and an ICE car is the need to cover the specialist components that are used in EVs.

Unlike petrol or diesel models, EVs have specialised components such as electric motors, inverters, and in many cases, advanced onboard technology. EV insurance policies will account for the value of these components, helping to ensure they’re repaired or replaced in the event of damage.

EV batteries, for example, are typically covered through comprehensive or collision insurance depending on the particulars of the policy. Many electric car insurance policies will also include protection for routine software updates, which are essential for running on-board maintenance and safety features in many modern EVs.

Home Charging Equipment and Battery Protection

EV insurance policies may also be underwritten to include home EV charging equipment, such as charging points, cables, and other equipment used for your home charging regimen. This cover will help to protect these items from theft, vandalism, or damage from technical issues like electrical surges. Some policies may also cover accidental damage to your charger and accessories, but you will need to check the details of the specific policy to see if this is covered. 

While this coverage can make policies more expensive compared to standard ICE policies, it’s a crucial feature for many EV drivers, as repairing or replacing your own EV charger can be extremely expensive.

Protecting Your Investment

Battery Replacement Costs

The battery of your EV is one of the most crucial components in the vehicle, as well as one of the most expensive to repair or replace. While your EV’s battery is likely to be protected by a warranty, it’s worth researching insurance policies that offer extended cover for battery repairs and ensure you’re not left to cover the high cost of repairs.

Many comprehensive EV insurance policies tend to cover your vehicle’s battery for theft, accidental damage, and fires, with equal coverage whether your battery is leased or owned outright.

Covering Specialist Repairs

As the EV segment grows, more and more garages are working to train up their staff and realign their services to accommodate the demands of electric drivers. Having said that, there’s still some disparity in the level of working knowledge between EVs and traditional ICE vehicles, which can make it difficult to find technicians with the right level of knowledge to deliver high-quality repairs and routine servicing.

Many EV insurance policies maintain relationships with EV-specialised mechanics, such as those we have here at Dick Lovett, where you’ll be able to send your car for maintenance covered by the policy. 

This will give you greater peace of mind knowing that your EV is being cared for by specialists who are familiar with the needs of electric vehicles, rather than general mechanics who are more used to working on conventional ICE models.

Supporting Sustainability

Green Driving Incentives

Some insurers in the UK offer incentives for drivers who are minimising their impact on the environment by driving an electric vehicle, providing discounts on premiums or special benefits such as access to public EV charging points.

If you’re conscious of your driving habits and want to make sure they’re as green as possible, there are other policies with features that promote eco-friendly driving you may be interested in, such as:

• Low-mileage policies that reward you for driving less

• Policies that donate a portion of the insurer’s profits to environmental initiatives

• Ethical policies with insurers who invest in low-carbon technologies and renewable energy development

Discounts for Eco-Friendly Vehicles

Despite the fact that electric vehicles have specialised components that tend to be more expensive to repair or replace, many insurers still try to enhance their green credentials by offering discounts for EVs and other low-emissions vehicles.

Because of this, insuring your EV may result in you finding a cheaper policy compared to insuring an ICE of a comparable value.

Factors That Influence EV Insurance Costs

Just like with petrol or diesel vehicles, EV insurance is tailored to the specifics of a given vehicle, driver, and other possible variables.

Here’s a look at some of the key factors that will influence the cost of EV insurance.

Vehicle Type and Model

The type of electric vehicle you need to insure, and the specific model, will have a significant impact on your insurance premium. High-end EV models often come equipped with advanced technology which will cost more to repair in the case of maintenance issues, which is a risk insurers have to guard against when calculating premiums. 

Many EVs are also built using specialist, high-demand materials, such as lightweight composites and aluminium, alongside the materials used to construct lithium ion batteries with enough capacity to deliver a practical driving range.

Battery Size and Replacement Costs

Your EV’s battery is one of its most expensive components, with larger, longer-range batteries increasing the potential repair and replacement costs compared to smaller batteries. 

The cost of battery replacement or repair can also be more expensive in the case of physical damage caused by accidents, as the resulting maintenance work often requires specialist equipment.

Due to these risk factors, vehicles with larger or more complex batteries are seen as higher risk by insurers, and often incur higher premiums.

Driving Habits and Mileage

Your annual mileage and personal driving habits are another key factor which can affect the cost of electric car insurance. 

While the overall running costs of an EV are generally cheaper than petrol or diesel models, spending more time on the road with your car means there’s an increased risk of accidents, and with the higher cost of repair associated with electric vehicles, this can translate to more expensive premiums.

Note that you may be able to reduce the expense of higher annual mileage by opting for telematics or pay-as-you-go policies.

Choosing the Right Insurance Provider

With the EV market growing rapidly, major insurers are taking notice and working to accommodate the increased demand for EV insurance in the UK.

When you start researching your options for insurance, you may feel slightly overwhelmed by the choice available, so it pays to be able to assess insurers methodically.

Some of the key factors you should look out for when choosing the right insurance provider include:

• Whether the insurer offers tailored policies for EVs, with specialised features like battery cover or protection for your home charging point, cables, and accessories
• Whether an insurer provides separate coverage for leased EV batteries, which may be an issue if you’re driving an older model of electric car
• Whether or not there’s EV-specific stipulations as part of the insurer’s breakdown cover, for example roadside assistance with mobile charging capabilities, or the capability to tow your car to the nearest public EV chargepoint
• The scope for policy add-ons like courtesy EVs or European coverage

Optimising Your Premiums

Once you’ve established your basic needs and found insurers who can provide these, there are a few more steps you can take to optimise your premium and ensure the final price tag of your EV insurance is as low as possible.

Here’s a look at what you can do to ensure you get the best premium possible.

Installing Security Features

People who park their car in a secure garage attached to their home can enjoy lower premiums thanks to the reduced risk of theft. While this ideal isn’t always possible, there are still certain things you can do to improve your car’s security and achieve a cheaper premium.

Fitting your car with extra security features, for example a steering wheel lock or GPS tracking, may help to reduce your car’s risk profile, and lower the cost of insurance. Bear in mind that this can vary depending on the provider and policy, so be sure to check with your insurer before you invest in these kinds of modifications.

Bundling Home and Auto Insurance

Many insurers offer discounts if you opt to bundle multiple policies with them, for example your EV, home, and life insurance. While insurers often advertise and upsell these deals as part of the sign-up process, it’s always worth investigating further in case you’ve missed a bundle deal that can help you insure your car for less.

Reducing Annual Mileage

As higher annual mileage increases the risk of accidents, reducing the distance you clock each year can be another effective way to optimise your EV insurance premium. 

Joining a carpool at your work, taking turns to drive with another named driver, and forward-planning grocery runs and other routine journeys can all be effective ways to reduce your mileage and achieve lower-priced insurance quotes.

Leveraging Green Discounts

Like many, you might have opted to switch to an EV in the first place because you were concerned about your personal impact on the environment, and looking for ways to decrease your carbon footprint.

Some insurers offer “green discounts” as part of special policies that reward you for efficient, low-emissions driving, usually with a telematics feature that collects data on your driving habits and updates your recurring insurance costs in real-time.

If you already make a point to limit your mileage and minimise your impact on the environment, then looking for electric car insurance with green discounts could be another effective way to reduce your premium.

Usage-Based Insurance Options

Usage-based insurance options, or telematics car insurance, uses your driving data to determine how much you’ll pay as a policy holder. These policies track datasets such as your speed relative to the local speed limit, how smooth or harsh your cornering is, and the time of day when you typically drive to build a more detailed risk profile and adjust your quote accordingly.

If you’re planning to be the sole driver on your policy, and you’re confident that your driving habits avoid behaviour that could increase your risk profile, a usage-based insurance policy could be another effective way to bring down the cost of your electric car insurance.