Fleetnews.co.uk: Electric vehicle insurance premium increases 'based on bad data'

Insurance premiums on electric vehicles (EVs) are being hiked by some firms based on ‘incorrect and irrelevant’ information, according to the Association for Fleet Professionals (AFP).

The trade body is calling for fleet decision-makers to work with their insurers so that they understand the degree of risk surrounding EVs better.

Paul Hollick, AFP chair, said: “We’re hearing of issues in certain areas. The first is the repair data that insurers employ to calculate premiums.

“Many are using information based entirely on experience with Teslas and applying this across the board to all EVs, even to vans.

“Clearly, this is problematic. The repair profile of Teslas is applicable only to Teslas, in the same way as any other manufacturer, and has very little relevance to commercial vehicles.”

Hollick believes that fleets and insurers need to be working together to create a situation where premiums can be calculated based on much better and directly applicable data.

He also highlighted how some insurers seemed unsure of the value of an EV that had been written off in an accident.

“This is especially the case where the battery may have been damaged as part of the write-off,” he said. “Some insurers seem to be working on the incorrect basis that the battery has no market worth. Again, this needs to be included in the maths behind premiums.”

The fire risk of EVs also appears to be a concern for insurers, with the potential for damage to then spread beyond the vehicle itself to other cars and vans, as well as surrounding property.

However, Hollick said: “EV fires, when they occur, are a serious issue, but experience so far shows that they are very rare – substantially less likely than fires in ICE vehicles – and we are unaware of cases where there has been a fire and a significant amount of harm has been caused in the immediate vicinity. The risk is just not that high.”

Research by the Swedish Civil Contingencies Agency, published in report in May 2023, revealed that internal combustion engine (ICE) vehicles were 20 times more likely to catch fire than EVs in Sweden
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