Driving down the road today, one sees a big increase in electric vehicles (EVs) as more and more drivers are buying them for different reasons. These reasons include more models from manufacturers, cheaper options including pre-owned cars, environmental benefits and new technology. However, with their growing popularity, owners and potential owners of EVs need to consider the pluses and minuses of driving an EV including insurance and their overall safety-especially from battery fires.
Some of the benefits of owning an electric vehicle include helping the environment. EVs release less pollution than regular cars, which means there is less tailpipe air pollution than regular vehicles. Another benefit is lower costs to run, as charging an electric vehicle usually costs less than fueling a gas-powered car. This is especially true for people who have home charging stations or can use low-cost public charging stations. EVs also have fewer moving parts than internal combustion engine vehicles, which can result in lower maintenance and repair costs. EVs have advanced technology, including features like regenerative braking, smart driver-assistance systems and many new hi-tech options. Drivers find these features appealing because they can make driving safer and more enjoyable.
Some of the problems with owning an electric vehicle include higher purchase prices. Electric vehicles are usually more expensive than gas-powered cars, even with government incentives and a more competitive market for new and used models. And while EV range is improving, some models still offer less driving range on a single charge compared to a full tank of gasoline. Charging infrastructure also varies by region, and long road trips may require careful planning to ensure charging station availability. Charging an EV takes longer than filling a gas tank, even with rapid chargers, and charging during a trip might require waiting, which can be inconvenient. Another downside is the cost of insurance which is more expensive. We will cover that topic next.
In general, insuring an EV for most drivers is the same as insuring a gasoline-powered car. Most insurance companies don’t have concerns about EV’s that would make them limit or exclude them from a policy. However, due to their generally higher purchase prices, expensive battery components and substantial technology, EVs often carry higher insurance premiums than conventional vehicles. Repair costs for EVs, particularly for the battery as well as all the additional technology inside and outside the car can also be more substantial. Replacement parts can take a while to get delivered, slowing down the repair process, which adds more cost. All these reasons can increase insurance rates charged by the insurance company. On top of that, recently there have been some losses due to battery fires caused by flooding that have insurers looking more closely at this potential risk for loss. In the next section we’ll review battery fire risk in more detail.
The safety of EV batteries, particularly concerning fire risks, is an important consideration for potential buyers. EVs use lithium-ion batteries, known for their energy density and ability to provide substantial power. However, these batteries also carry some fire risk, primarily due to the following factors:
EV manufacturers are improving battery safety and fire suppression systems. They are adding features to stop fires and make it less likely that they will start. EV owners should also take preventative measures when there is a storm approaching with flooding likely to move their car out of harm’s way. Fortunately, EV battery fire incidents remain relatively rare compared to gasoline vehicle fires, which are more common but typically less publicized.
Owning an electric vehicle has its benefits, from environmental advantages and lower operating costs to advanced technological features. However, challenges like higher purchase prices, limited range and higher insurance costs should be weighed when deciding if an EV is right for you. When it comes to safety, battery fire risk is a legitimate concern, and it’s important to know the risk and take action to minimize those risks.
Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.
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