UK Car Insurance in 2024: Electric Vehicles Impact

If you're thinking about buying an electric car in the UK, you're not alone. In 2024, a whopping 18% of all new cars sold were electric, up from just 10.7% in 2020. That's a big jump in just a few years!

But what does this mean for your car insurance? Don't worry, we've got you covered. Here's everything you need to know about insuring your electric car in the UK, from claims bonus to hybrid car options.

Why Are More People Buying Electric Cars?

There are a few reasons why electric cars, like the popular Tesla Model 3 and Tesla Model Y, are becoming more popular in the UK:

1. The government is offering money off the price of new electric cars (up to £2,500!).
2. There are more charging points than ever before – over 30,000 by the end of 2024.
3. People are more worried about the environment and want to do their bit.
4. Electric cars are cheaper to run than petrol or diesel cars, with lower road tax and fuel costs.

Here's a quick look at how many people are buying electric cars each year:

Experts think that by 2030, 30% of all new cars sold will be electric, including models like the Volkswagen Golf Electric and the smart EQ fortwo.

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How Much Does It Cost to Insure an Electric Car?

You might be wondering if it's more expensive to insure an electric car than a traditional car. The short answer is: it used to be, but not so much anymore.

In 2024, the average cost to insure an electric car for a year was £750. For a petrol or diesel car, it was £700. So there's still a bit of a difference, but it's getting smaller.

However, it's very important to note that electric car insurance premiums have been steadily declining as the technology becomes more widespread and insurers gain more experience in assessing the risks associated with these vehicles. In fact, between 2020 and 2024, the average annual insurance premium for EVs decreased by 12%, from £850 to £750.

Louise Thomas, an automotive risk intelligence analyst at Thatcham Research, noted, "While electric vehicles are generally cheaper to fuel and maintain, their higher purchase price and repair costs can lead to higher insurance premiums compared to equivalent petrol or diesel models. However, as EV technology becomes more mainstream and repair processes more efficient, we expect this gap to continue narrowing."

So if you're thinking about getting an electric car, don't let the insurance costs put you off. They're getting better all the time!

What Affects the Cost of Electric Car Insurance?

There are a few things that can make insuring your electric car more expensive:

Electric cars can cost more to buy in the first place, leading to higher insurance prices.

1. If you have an accident, electric cars can be more expensive to repair due to special components and limited availability of spare parts.
2. Electric car batteries are really expensive to replace, which is factored into insurance premiums.
3. Insurers don't have as much data on electric cars as they do on traditional cars, which can impact risk assessment.

Your age, driving history, and where you live can also affect your insurance costs.

But it's not all bad news. Some insurers offer discounts if you have an electric car, and the government is keen for more people to switch to electric, so they're looking at ways to make insurance cheaper too.

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Insurers Adapt to the Growing EV Market

As the EV market expands, insurers are tailoring their offerings to cater to the unique needs of EV owners:

1. Specialised coverage: Many insurers now provide EV-specific coverage options, such as battery cover, charging cable protection, and roadside assistance for charging-related issues.
2. Discounts for EVs: Some insurers offer discounts for EV owners to incentivise the adoption of eco-friendly vehicles and reflect the lower risks associated with these cars.
3. Partnerships with EV manufacturers: Insurers are partnering with EV manufacturers to develop integrated insurance solutions and gather more accurate data on EV performance and risks.
4. Green initiatives: Some insurers are aligning their offerings with environmental sustainability goals, such as offsetting carbon emissions or investing in renewable energy projects.

John Lewis Finance, a popular comparison provider, reported a 60% increase in EV insurance quotes between 2020 and 2024, highlighting the growing demand for car insurance tailored to electric vehicles.

According to the Association of British Insurer, the total cost of EV insurance claims in 2024 was £350 million, up from £150 million in 2020. This increase was largely due to higher repair costs and limited availability of spare parts for EVs. However, as more EVs enter the market and repair processes become streamlined, these costs are expected to decrease.

What Kind of Insurance Do You Need for an Electric Car?

The good news is that you can get all the same types of insurance for an electric car as you can for a traditional car. That includes:

Comprehensive cover (which covers damage to your car and other people's)

• Third-party, fire, and theft cover (which covers damage to other people's cars, and your car if it's stolen or catches fire)

Breakdown cover (in case your car breaks down and you need help)

Uninsured driver promise (which protects you if you're hit by an uninsured driver)

Some insurers also offer special electric car insurance policies that include things like battery cover, charging cable protection, or a replacement car while yours is being fixed after an accident or other insured incident.

How Can You Get the Best Deal on Electric Car Insurance?

If you want to get the best price on your electric car insurance, there are a few things you can do:

1. Shop around and get quotes from lots of different insurance providers.
2. Look for insurers that offer discounts for electric cars or eco-friendly vehicles.

Think about getting your home insurance from the same company as your car insurance – sometimes you can get a discount for bundling policies.

1. Be a safe driver and try to build up your no claims bonus over time.
2. Pick an electric car that's less expensive to insure – some models, like the smart EQ forfour, are cheaper than others.

Steve Gaywood, Director of Sales at the Institute of the Motor Industry, said, "As more and more people switch to electric cars, it's important for insurance providers to adapt their offerings and provide competitive, tailored policies. By partnering with EV manufacturers, leveraging telematics data, and investing in green initiatives, insurers can better serve the needs of electric car owners while promoting sustainability."

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What Does the Future Look Like for Electric Car Insurance?

As more and more people switch to electric cars, experts think that insurance will keep getting cheaper. By 2030, they predict that:

1. Most insurers will offer tailored electric car insurance policies as standard.
2. The cost of insuring an electric car will be much closer to insuring a petrol or diesel car.
3. Insurers will use advanced telematics data from your car to more accurately assess your individual risk and provide tailored premiums.

More insurers will partner with car manufacturers to offer integrated insurance solutions when you buy a new electric vehicle.

So there you have it – everything you need to know about insuring your electric car in the UK. The future is looking bright for electric car owners, and with a bit of shopping around, you can make sure you're getting the best deal on your insurance.

Happy driving!

Frequently Asked Questions

Are electric cars more expensive to insure than traditional cars?

They used to be, but the gap is getting smaller. In 2024, the average cost to insure an electric car was £750, compared to £700 for a petrol or diesel car.

What extra insurance do I need for an electric car?

You can get all the same types of insurance for an electric car as you can for a traditional car, like comprehensive cover, third-party cover, and breakdown cover. Some insurers also offer specialised policies that include battery cover, charging cable protection, or a replacement car while yours is being fixed.

How can I get cheaper insurance for my electric car?

Shop around for the best deals, look for insurers that offer discounts for electric cars, consider bundling your car and home insurance, build up your no claims bonus, and pick an electric car that's less expensive to insure.

Will electric car insurance keep getting cheaper?

Experts think so. As more people switch to electric cars and insurers get more data on them, the cost of insurance is likely to keep going down.

References

• [1] www.smmt.co.uk