“I feel corporations are capitalising a bit, and electrical fashions appear to undoubtedly get hit tougher,” he stated.
“I’m listening to of electrical automobile quotes of 1000’s of kilos a yr. It’s gone mad. It’s simply ridiculous.”
Age and expertise is turning into much less vital
The motor insurance coverage trade has been grappling with massive losses following a post-pandemic growth in claims.
Automotive insurers’ “internet mixed ratio”, which reveals claims and prices as a proportion of premiums, hit 109.5pc final yr, the worst underwriting efficiency in a decade, in accordance with EY. Something above 100pc represents an underwriting loss.
The UK motor insurance coverage market is anticipated to endure one other underwriting loss this yr, earlier than recovering to interrupt even in 2024, in accordance with Oxbow Companions, a administration consultancy.
The batteries electrical vehicles run on are a giant a part of the issue. A Telegraph investigation revealed cases the place electrical automobiles have been written off as a consequence of minor injury sustained by their batteries.
Consultants attribute this vulnerability to the battery being positioned on the underside of the automobile, growing the chance of injury even in minor accidents.
Mark Fry, of automotive danger agency Thatcham Analysis, stated the price of changing a battery – usually between £14,200 to £29,500 – might be greater than a automobile’s value due to depreciation, particularly if it’s important to scrap the battery relatively than restore it.
“If batteries are broken they price so much to restore, something from 30 to 50pc of the price of the automobile itself. Batteries are one of the costly spare components ever produced.”
Mr Fry added that, in terms of pricing up a coverage, whether or not you’re a 20-year-old boy racer or a cautious pensioner is turning into much less vital than what kind of automobile you drive.
“We’re beginning to see the stability of danger transferring away from the motive force in direction of the automobile.
“Usually, insurance coverage premium prices are made up of many components, and the potential price from repairing the automobile is now posing a bigger general danger.”
However costly components are solely a part of the image. Insurers are additionally warning {that a} lack of educated mechanics is contributing to larger premiums.
Solely 16pc of mechanics can work on electrical automobiles, in accordance with the Institute for the Motor Business, which predicts a 4,500 technician shortfall by 2029, growing to 16,000 by 2032.
Ms Thomas stated: “Bold internet zero plans and Covid have additionally meant some provide chain points and an absence of educated professionals who can perform repairs.
“And while you additionally issue EV acceleration velocity in comparison with ICE vehicles, the danger issue will increase as soon as once more for the insurer.
“With all of this mixed, this might be why some EV drivers are being declined from an insurer.”
