electric cars

First insurance company no longer accepts electric cars

Damage to electric cars is expensive, especially when the batteries are affected. This is slowly becoming an expensive gamble for insurance companies. Now the first company is pulling the emergency brake. New applications will no longer be accepted and existing contracts will no longer be renewed. You want to recalculate the whole thing first.

For insurance companies, insuring vehicles with internal combustion engines is a familiar calculation. Decades of experience lead to reliable values ​​that also enable profitable business. But things are different with the new electric vehicles. Even minor accidents result in high costs if the batteries are defective or there is fear of damage. In some cases, this even leads to these cars being scrapped for safety reasons even if they have minor damage .

In Great Britain, the first insurance company, John Lewis Financial Services, has already suspended, at least temporarily, the acceptance of new insurance contracts for electric vehicles and the extension of existing such contracts. As the British media report, the company wants to carry out an extensive cost and risk analysis before proceeding. The Telegraph reports :

“Insurers are facing rising vehicle repair costs that are eating into their profits. According to the Association of British Insurers (ABI), the cost of vehicle repairs rose 33 percent in the first quarter of 2023 compared to 2022, helping annual premiums reach record highs.”

Accordingly, repairing an electric vehicle costs on average a quarter more than repairing a combustion engine, with the batteries mounted on the vehicle floor in particular obviously posing a problem. Even driving over a curb can cause ( potentially dangerous ) damage. And since batteries are generally the most expensive part of electric vehicles, this has a corresponding impact on insurance benefits. It is therefore to be expected that insurance premiums for such vehicles will also rise significantly. Because no insurance company wants to operate a loss-making business. For some electric fans, this could be a very expensive awakening.