EV insurance: what’s the best policy?

Industry-wide soaring insurance premiums and higher acquisition costs of electric vehicles give fleet decision-makers the perfect motive to review insurance policies.

In many respects, the same primary risk considerations that apply to vehicles with an internal combustion engine are relevant to EVs. However, the in-built connectivity in battery-powered cars and vans gives fleet managers an extra weapon to deploy different solutions.

EVs still require mandatory third-party liability, but fleets might be able to make savings in additional cover for theft and own damage.

Firstly, connected vehicle technologies make it easier to track EVs, so if a fleet suffers a theft, there is a higher chance of recovering the vehicle, which should provide some leverage when negotiating insurance premiums.

Secondly, capturing data on driving behaviours, such as speeding incidents, without installing third-party telematics systems can help fleets identify higher-risk drivers and implement training procedures to avoid bad habits leading to collisions. Working with insurers should provide the grounds for lower claims costs, followed by lower premiums.

The same data also lays the foundations for so-called self-insurance, whereby fleets agree to a substantially higher deductible in return for a lower premium, confident they can manage their claims costs. Aggregated across hundreds or even thousands of vehicles, this approach cuts insurance costs and minimises insurance premium tax.

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