Electric vehicles spark insurance concerns

Electric vehicles spark insurance concerns

The spotlight has once again fallen on the electric car market with the news that for the third time in two weeks, it has been widely reporting in the media that a Tesla electric vehicle has crashed with the driver telling authorities that the car's Autopilot self-driving system was engaged at the time.

Tesla are in the process of investigating all three incidents, which have all occurred in the USA, a country which has by far the largest number of Tesla vehicles on the road. The most recent incident occurred in the early hours of Sunday 10th July with minor injuries to both passengers, however in May 2016, a 40 year old male from Ohio was fatally injured when his Tesla Model S Autopilot system allegedly failed to detect a tractor-trailer turning in front of the luxury electric car. The U.S National Transportation Safety Board are carrying out ongoing investigations into the fatal accident.

So what are the implications for the insurance market and UK customers who own or are planning to purchase electric cars which will need to be insured?

Nearly 9,000 electric vehicles were purchased in the UK in 2015 and that number is growing rapidly. But it’s fair to say that the relationship between UK insurers and some electric car manufacturers has been challenging, even before the reported incidents.

Despite the positive growth predictions for EV market, finding appropriate insurance for an EV may not be straightforward in the shorter term because some EV manufacturers do not adhere to the requirements of the UK insurance market by providing important details of repair specifications for their vehicles.

Electric car

We are aware of some electric car manufacturer whose vehicles are currently being declined by insurers or are having several conditions and exclusions placed on policies.

An additional issue is the tracking systems used by some EV manufacturers which have been developed in-house and are not currently compatible with UK insurers’ preferred ‘Tracker’ system software.

No doubt conversations will continue between EV manufacturers and UK motor bodies on this emerging technology, including the Association of British Insurers and the Department of Transport, regarding the supply of repair and parts information and tracking systems to find a solution.

Despite the reported incidents, in due course, market forces are likely to drive both manufacturers and the insurance industry to find common ground but in the short term, our specialist automotive & manufacturing team at Griffiths & Armour are offering to conduct a thorough check on the insurance implications for our clients before they purchase a new electric car.

We will also be keeping a close eye on developments and the outcome of ongoing investigations and will communicate any updates to our clients when they become available.

If you would like more specific information on the position of motor insurers and EVs, please get in touch by contacting Lynsey Milburn on lmilburn@griffithsandarmour.com.

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