Electric vehicles (EVs) have become a familiar sight on European roads, prompting many drivers to consider making the switch. As the popularity of EVs grows, questions arise about their long-term viability and the advantages they offer compared to traditional gasoline-powered vehicles, both for the owner and the environment.
We've previously discussed the benefits of driving and traveling with an electric car. These include its quiet operation, zero emissions, and cost savings when comparing fuel and electricity costs.
However, many EV owners are surprised to find that casco insurance costs for electric cars are significantly higher than for traditional gasoline-powered vehicles.
Many people believe that insurers artificially inflate insurance costs for electric cars. The truth is that insurance premiums for EVs are based on concrete factors. We interviewed Roberts Skrupskis, Motor Risk Manager at If, to understand these considerations better.
Statistics confirm the popularity of electric mobility: the number of new EV registrations in Europe reached almost 3.2 million in 2023, a 20% increase compared to 2022.
Despite this growth, the market is still dominated by cars with internal combustion engines (ICE). A vast supply chain, developed manufacturing processes, and established refueling infrastructure mean that driving an ICE car is like walking down a well-trodden path. The same goes for repairs — there is a much bigger market for spare parts for ICE cars, significantly reducing repair costs.
Like combustion engine cars, the price of electric car insurance is determined by two main factors – the frequency of accidents and the average claim amount. Here's why these factors make an EV’s casco policy more expensive.
The average casco indemnity for an EV is still much higher and continues to rise. If's casco claim figures show that the average claim for an electric car ranges from two to two and a half thousand euros. By comparison, the average claim for diesel or petrol cars is around one thousand less.
High repair costs are one of the main reasons for the elevated insurance premiums for EVs. Unfortunately, the promise that EVs have fewer moving parts and, therefore, break down less often has not been fulfilled. Their heavier weight and susceptibility to road damage, such as potholes, increase the cost of repairs.
After a serious accident, repairing an EV is bound to be more complicated than fixing an ICE car. This is due to the high-tech appliances in electric vehicles, such as cameras, sensors, and other advanced equipment. There are also far fewer qualified mechanics specializing in EV servicing.
Battery replacement costs are a major concern for insurers. Batteries are usually installed under the passenger compartment and cover a large area, which makes them more vulnerable to damage. Even a minor collision can result in costly repairs or a total loss due to the high replacement price of the battery, which can be up to half the car's value.
Even bigger problems can arise with second-hand electric cars. While a new EV has a clear history and dealer warranty, used electric car owners cannot be sure of its past, as it may have hidden damage. There are cases of heavily damaged EVs brought from the US to Europe, where they were restored and ended up in the hands of new owners. This type of car poses increased and unpredictable risks in its future use and, in the case of new accidents, can endanger the health and lives of passengers.
Until a few years ago, electric car owners traveled shorter distances because there was little opportunity to charge the car along the way. Today, EVs are already achieving a range of kilometers equivalent to that of conventional cars.
In terms of average accident frequency, EVs now outperform internal combustion cars. This is partly because electric cars are mainly driven in large cities with heavy traffic. In addition, electric cars tend to crash at higher speeds because they are more powerful and pick up speed more quickly.
Speed and power are among the main reasons many people choose electric cars. Roberts Skrupskis explains, "Let's imagine an equation: above-average powerful car travels at an above-average speed and is allowed to drive in the public transport lane. It’s only the matter of time when accident happens, especially if to consider that other road users are not yet used to the powerful acceleration of electric cars."
Combining the increased accident frequency with a significantly higher average indemnity results in a more expensive casco insurance policy. Insurance will also cost more for younger drivers (under 30 years) and drivers with less driving experience.
The EV market is constantly evolving to meet consumer demands, technological advancements, and environmental goals with an eye to the future. Insurance, on the other hand, must address the immediate protection needs of electric car owners today.
If you are an EV owner or planning to become one, getting an electric car casco policy means protecting yourself against very high potential expenses. If's electric car insurance includes, among other things, special protections for electric cars – the charging cable and device are covered, 24/7 roadside assistance can be called even if the battery runs out while on the road, and compensation 15% higher than the market value in case of a total loss.
Accidents can happen to anyone, regardless of driving experience or vehicle type. Don’t take any chances – from hailstorms to animal collisions, casco insurance protects you from unexpected costs and provides peace of mind.