Is Car Insurance For An Electric Car More Expensive?
Electric Vehicles (EVs) are regarded as ideal for the environment as these lead to less pollution and can be operated cheaply. The driving range is higher for the costs, as compared to traditional diesel or petrol cars. But the insurance rate for electric car is higher as compared to the conventional counterparts. There are various reasons why the premium cost is higher:
Higher cost of electric cars
The purchase cost of electric vehicles is more than that of diesel- or petrol-powered cars. Electric cars are powered by state-of-the-art technology, sophisticated components, high-capacity batteries etc. The more the expenses for a car, the more is its Insured Declared Value (IDV). Naturally this will leave to an increase in the premiums.
Electric car components are more expensive
It is important to note that electric vehicles have fewer movable parts as compared to diesel- or petrol-powered cars. The lithium-ion battery that powers these cards happens to be the most expensive part. Over half of the cost of electric vehicles is due to the battery in them. The replacement or even repair of these batteries is expensive. This is a major cause for higher car insurance premiums.
At the moment, electric vehicle manufacturers are trying to bring out lithium-ion batteries for electric cars at a lower cost. When the costs of these batteries take a drop, the car insurance premiums can also be expected to get reduced as a result.
Replacements of batteries are quite common
The lithium-ion batteries in electric vehicles have an expiry date or shelf life before it stop working or start underperforming. Over a period of time, the battery needs to be replaced for this reason. Lithium-ion batteries have a high cost and the replacement expenses are higher. Naturally, the insurance premiums are higher as well. In case the replacement cycle of these batteries take a drop, the cost will drop as well. The premiums will also be lowered.
Fewer mechanics available for electric cars
High level of maintenance is needed for electric vehicles, as these have very complex and expensive parts. Highly skilled mechanics are needed for repairing these cars or for servicing them. At present, there is a lack of skilled technicians for these vehicles in many countries. In case of an accident, if there is a need for components or repair work, policyholders might not be able to get the necessary parts or skilled technicians easily. Naturally, the premiums for electric cars are higher than traditional cars out there.