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Why is Electric Car Insurance So Expensive?

Feb 16, 2024

Many drivers have switched to electric cars as a means of cutting down on their emissions. Similarly, some fleet managers are planning to electrify their fleets in the coming years.

Reduced running costs are a major benefit of electric vehicles, particularly when many have serious concerns about rising fuel prices. But some have found that, while it may cost less to run an electric vehicle, they can cost a lot more to insure than petrol or diesel vehicles.

How Much is Electric Car Insurance?

Electric car insurance has risen sharply over the past year or so. One driver reported that, in July 2023, the annual cover for his Tesla Model Y rose from £1,200 to more than £5,000. Worse, some insurers outright refused to cover him at all – including specialist EV car brokers.

As we recently discussed on our blog, the cost of car insurance has gone up for all drivers. But electric car drivers have been hit by particularly hard. According to one report, in September 2023 insurance premiums for electric vehicles were up 72% compared to the previous year – amounting to an average annual increase of £402.

So Why is Electric Car Insurance So Expensive?

There are a few reasons why electric vehicles cost more to insure than traditional petrol and diesel vehicles:

  • Higher Repair Costs – Electric cars are powered by some highly complex systems and components. This means that any repairs will require a lot of specialist expertise, along with some very pricey parts. The more it costs to repair a vehicle, the more you’ll pay for insurance.
  • Parts and Labour – Repairing an electric vehicle might require importing certain parts, which may be subject to delays. Also, if there aren’t any EV specialists in the area to fix the vehicle, the vehicle may have to be transported for necessary repairs. All of this will further drive up the cost of repairs, along with insurance cover.
  • Battery Weight – The extra weight of batteries used to power electric cars means that when they are involved in an accident they tend to cause more damage to third party vehicles. This increases the cost of repairs and is likely to mean there is a greater possibility of vehicles being written off.
  • Lack of Insurance Expertise – Electric cars are still the minority on UK roads. Many insurers are simply inexperienced when it comes to insuring them. They may not yet know how to assess the risks associated with electric cars, which means they’ll struggle to quote accurate premiums. They may therefore charge more as a matter of course, to cover all possible circumstances. Or they might refuse to cover electric vehicles at all.

Will Electric Car Insurance Always Cost More Than Cover for Petrol or Diesel Cars?

As electric vehicles become more widespread on UK roads, and as the infrastructure catches up with their prevalence, then we might expect the shortage of parts and qualified technicians to become less of an issue. Insurers, too, will only get increasingly familiar with electric vehicles and their associated risks. All of this will likely bring down the cost of cover, in the long-term.

This is a challenging time for electric car drivers. The insurance situation only makes things more challenging. And it’s at times like this that the expertise of an experienced insurance broker can make a huge difference.

Talk to us and we’ll work together to get you car insurance cover that reflects your personal circumstances. We can advise on the requirements that insurers may have, and we can help you understand the specific risks you might be facing as an electric vehicle owner. For more information, call Kelly on 0208 290 9099 or email personal@anthonyjones.com.

Do You Manage a Fleet?

This might present a particular challenge for fleet managers, who will have to factor insurance costs into their electric vehicle adoption strategies.

If you are a fleet manager looking to electrify your fleet, we’re here to help. We can support you in your transition to fully electric fleet through advising on risk management, and on the insurance and compliance implications.

Talk to our friendly team of commercial motor experts today. Call us on 020 8290 9099 or email us at commercial.motor@anthonyjones.com.

Get a Quote

You can call us during normal office hours, Monday to Friday, 9am to 5pm. Outside of office hours you can either email us or leave an answerphone message and we promise to get back to you the next working day.

General enquiries:
020 8290 4560

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