Electric vehicles (EVs) continue to gain traction in the U.S. auto market. While it won’t happen overnight, it’s safe to say EVs will become more prevalent on U.S. roadways in the future. 

On the surface, one might assume that auto insurance for an EV would be similar to that of internal combustion engine (ICE) vehicles, those that run on gasoline or diesel. Yet, there are significant differences between the two, particularly when it comes to the potential exposures EVs can incur. This blog discusses the risks that could impact insurance costs for EVs. 

Five Unique EV Exposures 

Because EVs tend to cost more than ICE vehicles, their insurance rates are usually higher. However, other factors unique to EVs can also make insuring them costlier. Such factors include:

1. Battery Problems: Under certain conditions, lithium-ion and other battery types that power EVs can ignite or explode. Notably, these battery fires burn longer and hotter, release more toxic fumes and liquids, spread faster over a larger area, and are more difficult to extinguish than traditional vehicle fires. These hazards present an entirely new set of insurance challenges.
2. Costlier Repairs: Most EV powertrain parts cost significantly more than equivalent parts for ICE vehicles. Batteries are especially costly and vulnerable to damage. An accident that might be a fender-bender on a standard car could result in an EV’s total loss, if the battery takes serious damage. Adding to costs, EV repairs usually require more labor hours. This is partly due to EV technology’s increased complexity, as well as auto mechanics’ difficulty in learning to work on unfamiliar machinery. However, repair times should shorten as a new generation of technicians gains experience.
3. High Voltage Hazard: High voltage electrical cables run throughout EV bodies. If a severe accident occurs, exposed cables can cause serious injury to passengers or first responders trying to free crash victims from damaged vehicles.  
4. Pedestrian Accidents: One selling point of EVs is that they operate virtually silently, without the engine and exhaust noise generated by ICE vehicles. While a welcome benefit for many owners, this lack of audible operating noise can put pedestrians at greater risk of harm if they fail to hear an approaching EV.
5. Cyberthreats: Like most new cars and trucks, EVs offer connected car technologies such as Wi-Fi, data sharing and semi-autonomous systems that leave them vulnerable to cyberthreats. Subsequently, the public charging stations EVs rely on to recharge their batteries add another layer of risk. Charging stations may serve as an entry point for malware attacks, data theft, system outages, bugs and glitches.

We’re an Auto Insurance Leader and We’re Here to Help

To learn more about insurance for EVs, talk to the auto insurance experts at VTC Insurance Group. You can reach us at 248.828.3377 or visit vtcins.com. 

This blog is for informational purposes only and is not intended as legal advice.