Search
Close this search box.
Sign up for our weekly Newsletter

Claim rates are key to controlling EV premiums

The fleet view is often that insurers don’t like EVs because they tend to be expensive to buy, that parts are often in short supply, and that the electrical, mechanical and bodywork expertise needed to repair them is still in short supply although insurers say that these things matter but only to a limited extent, and that the most important fact when it comes to controlling premiums is to do more to prevent EV accidents and theft.
unnamed 3
Paul Hollick

Share

7 February 2024

 

INSURERS are telling fleets that minimising claims rates are the key to keeping electric vehicle (EV) premiums under control, the Association of Fleet Professionals (AFP) said.

The organisation reported in October last year that its members were complaining that while all insurance premiums were rising substantially, EVs were being especially targeted.

Paul Hollick, chair, said: “Our advice to fleets at that time was to engage their insurers in a dialogue about possible solutions, and many of them have been doing just that. The main message that is coming through is that insurers want to see evidence of good core risk management, and how this having an impact on claims rates.

“This might sound obvious but it seems they want to work with fleets to see that insurance fundamentals are being properly followed when it comes to EVs.”

Hollick said that the mood could be summed up by one fleet manager, who had reported that “our insurer’s view is that as long as we can demonstrate that we’re managing the risk, such as by training drivers to use EVs, we won’t see an increase in premiums.”

He said that another had fed back that their insurer had indicated that the cost of repairing and replacing EVs would always be a distant secondary consideration to simply working to keep claims as low as possible.

“The fleet view is often that insurers don’t like EVs because they tend to be expensive to buy, that parts are often in short supply, and that the electrical, mechanical and bodywork expertise needed to repair them is still in short supply.

“However, it appears that if you talk to the insurers themselves, they’ll say that these things matter but only to a limited extent, and that the most important fact when it comes to controlling premiums is to do more to prevent EV accidents and theft.

“They also appear to want evidence that fleets have an understanding that EVs are different from ICE vehicles and to see this applied to risk management – driver training is mentioned – but really, they’re mainly interested in the fundamentals.”

Hollick said that the dialogues fleets were having with insurers were indicative of the importance of keeping channels of communication open with suppliers. “Some fleets may view the attitudes from insurers that are being reported here with a degree of scepticism. However, we are certainly hearing from others who are doing what their insurer is asking in terms of managing EV risk that their premiums are not rising, or only by a little. It shows that talking to suppliers in the face of rising costs can have an impact.”

 AFP board member Peter Milchard will be taking a lead on insurance topics within the organisation, supporting members and helping to educate the insurance market about our fleet requirements.

Award Winners 2024

Share this article

Facebook
Twitter
LinkedIn
WhatsApp
Reddit
Email

Want more motoring news?

Sign up here for our free weekly serving of motoring.

Sign up here for our free weekly serving of motoring.

Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

Latest news

Top