The year was 1985, and the movie was Back To The Future. The now classic sci-fi film theorised that in the year 2015, we’d have flying cars.

‍

It’s now 2023, and we’re not quite there yet. 

‍

Nonetheless, the automotive industry has made immense leaps and strides. Although our cars might not fly just yet, some do drive on autopilot.

‍

The era of electric cars has landed on us! 

‍

This automotive innovation has been met with much excitement. 

‍

Still, there’s no ignoring the resounding confusion and endless questions that have also arisen from sceptics, especially regarding car insurance.

‍

Insuring an electric car presents unprecedented and unique challenges compared to traditional petrol-powered vehicles.

‍

Off the top of our heads, some of these challenges we can think of are battery coverage, charging station coverage, maintenance and repair coverage, and other unique risks and costs related to electric cars.

‍

Let’s look at the car industry’s latest technological development and what it means in the insurance world.

‍

Battery Coverage

‍

As the electric car market grows, so does the need for good car insurance, and the first place to start is with the battery.

‍

The battery pack is one of an electric car's most expensive and critical components, costing thousands of Rands to replace.

‍

Electric Vehicle (EV) batteries are expensive because their components are expensive.

‍

EV batteries use rechargeable lithium-ion batteries. Each cell is the cathode, one of the two electrodes that store and release electricity, which can cost a pretty penny.

‍

Also, consider other components that go into a cathode, like nickel, cobalt, manganese and lithium, all add to the expenses.

‍

So, when it comes to battery coverage, it typically covers damage to the battery resulting from an accident, theft or other covered perils. 

‍

A damaged or degraded battery can significantly reduce the car’s resale value, so having coverage helps ensure the battery is repaired or replaced to maintain its value.

‍

Moreover, with how rapidly technology evolves, having coverage can help you, as an electric car owner, to upgrade and experience the latest in battery technology.

‍

You can have the newest technology, offering better performance without much hassle.

‍

Different battery coverage options are available for EVs, including warranty, insurance and battery replacement, to name a few.

‍

Warranty coverage

‍

Most cars have a manufacturer’s warranty, and electric vehicles are no different.

‍

In the unfortunate event that something does go wrong, rest assured that the warranty will cover the issue. Of course, the specifics differ based on different policies, so remember to check the type of warranty offered by your chosen electric car manufacturer.

‍

Most warranties cover several years or up to a certain mileage threshold. Sometimes, an extended warranty may be available at an additional cost.

‍

Insurance coverage

‍

Electric cars have many implications for insurance, as technology creates new risks and exposures.

‍

Coverage for the battery pack is typically offered as an add-on to a comprehensive car insurance policy. The premium for electric car insurance may be higher than for a traditional petrol-powered car due to the higher cost of the battery pack.

‍

However, this depends on the make and model of the car, with some brands costing more to insure than others.

‍

For insurance companies, assessing the risk of battery-related issues means analysing an array of factors like the type of battery, its age, the vehicle type and how it is used.

‍

As mentioned earlier, EV technology is relatively new, and there are still many unknowns about the batteries and how they’ll perform over time. Because of this, insurance companies tend to view electric vehicles as a higher risk.

‍

To mitigate this risk, insurance providers will charge higher premiums or offer limited coverage for battery-related issues.

‍

Some insurers might even require electric car owners to undergo additional safety training or have their vehicles inspected more frequently.

‍

Charging Station Coverage

‍

Using public charging stations can pose certain risks; they are often located in public areas and, as a result, can be subject to accidents, vandalism, or other damage that can harm the EV while it’s charging.

‍

Crime surrounding EVs is rife; charging stations are rapidly advancing, and some are connected to the internet, making them susceptible to cyber-attacks.

‍

Hackers could gain access to the charging station’s system and potentially steal personal information or install harmful software.

‍

And while you can find electric cars on almost every continent, they’re still a bit of a rarity, as are their charging stations. 

‍

High demand but low availability could result in the charging station being out of service or already in use, leaving you stranded without enough power to reach your destination.

‍

There’s also a risk of electrical shock or fire if the charging station is not maintained correctly or if there is a fault in the wiring.

‍

And as an electric car owner, your safety is compromised while using public charging facilities. This is further exacerbated if the area is dimly lit or isolated.

‍

Regarding insurance coverage for these risks, you have a few options as someone with an electric car.

‍

For starters, liability insurance can protect against damage to third-party property or injury to others from public charging stations.

‍

Then you have collision coverage which protects against damage to your electric car due to an accident, vandalism, or other similar events. Theft coverage can also protect against charging equipment and car theft.

‍

As someone who possesses an electric car, the insurance specifications can be somewhat of a foreign concept, but that’s precisely why you must acquaint yourself with the policy documents.

‍

Regarding claims, insurers will look at factors such as the station's location, the type of charging equipment used, the volume of charging activity and the history of claims or incidents of that specific charging station. 

‍

By carefully reviewing the coverage and knowing the limitations and the exclusions, insurance for your electric baby can be straightforward.

‍

You can also mitigate the risk and reduce insurance costs by implementing safety protocols, regularly maintaining equipment, and ensuring compliance with industry standards and regulations.

‍

Maintenance and Repair Coverage

‍

Speaking of performing maintenance and repairs, an electric car is like any other traditional vehicle in that it also needs regular upkeep.

‍

But, unlike traditional vehicles, EVs have fewer moving parts than fuel-powered cars, meaning fewer components require regular maintenance or can break down.

‍

They can also have a large and expensive battery that requires eventual replacement. However, these batteries typically come with several years' warranty, so owners don’t have to worry about replacement for a while.

‍

Electric cars also require less maintenance on a charging system than fuel-powered vehicles on their system. 

‍

With EVs, as an owner, you don’t have to worry about oil changes, spark plug replacements, or other traditional maintenance associated with conventional cars.

‍

Also, while you're limited to filling up standard cars at a petrol station or garage, with electric vehicles, you can charge them at home or a public station. 

‍

And best of all, changes in fuel cost can affect how much one spends on filling their car’s tank, while EVs don’t have this problem. However, the repairs can be costly due to the specialised equipment and expertise needed to work on an EV’s electric drivetrain, motor and battery system. 

‍

But the cost is usually offset by the lower frequency of repairs and the availability of a manufacturer’s warranty that covers the repair costs.

‍

Should the need for repairs arise, you’re mostly looking at things like software updates to ensure optimal performance. Service contracts are similar to extended warranties, providing certain types of repairs or maintenance beyond the warranty period and roadside assistance, which gives you peace of mind when you’re out on the road.

‍

And as far as insurance goes, similar to battery coverage, maintenance and repair coverage will depend on the make and model of the car, its age and condition and your driving behaviour.

‍

Some insurance companies may require additional coverage for certain repairs or maintenance.

‍

For example, a car with a known battery pack problem will need battery replacement coverage as an add-on to the insurance policy.

‍

Luckily, as someone with an electric car, insurance does give you a bit of a break.

‍

Some insurance providers offer discounts if a warranty is already in place, reducing the insurance cost due to the reduced risk.

‍

Unique Risks for Electric Cars

‍

The uncharted territory also means an unknown risk. 

‍

Here are some risks to look out for with electric cars and how they can affect your insurance coverage and costs.

‍

Fire: 

Electric cars are generally less prone to fires than petrol or hybrid vehicles (per 100 000 sales); if a fire does break out, it burns longer and hotter. 

‍

EVs have lithium-ion batteries that use flammable material. Exposure to extreme temperatures can lead to an explosion and a fire requiring thousands of litres of water to put out.

‍

This is because, unlike fuel-powered vehicles, the battery will continue to emit energy even after you turn the car off.

‍

Battery degradation:

EVs rely on rechargeable batteries, which can have a limited lifespan. Over time, the battery’s capacity decreases, losing its ability to hold a charge. This lowers the car’s range, and replacing the battery can be expensive.

‍

Battery degradation can be caused by temperature, humidity and usage patterns.

‍

Battery recycling:

The process of recycling EV batteries is complex due to the number of vehicles joining our roads increasing yearly. 

‍

The sheer volume of batteries needing recycling is ever-increasing, meaning significant investment is required to develop and support the recycling infrastructure.

‍

Another challenge is the batteries themselves. Lithium-ion batteries differ in size, chemistry and design, making developing a standardised recycling method harder. 

‍

Charging infrastructure:

Steer clear of fast chargers; they harm your battery’s lifespan. By how much, experts aren’t yet sure since EVs and the technology surrounding them are still relatively new. Either way, it’s best to avoid them altogether.

‍

Also, charging stations may be few and far between, making it harder and more inconvenient to charge your car at a moment’s notice.

‍

Insurance companies have tried to adapt to the changes in the automotive industry by allowing insuring electric cars. Naturally, this new crop of insurance policies differs from the already established ones of traditional motors.

‍

Insurers still consider age-old factors such as a driver’s age, insurance history, home address and driving record. 

‍

But, newer considerations like the battery type, range and charging infrastructure have now been factored into an insurance policy.

‍

Insurers will look at the likelihood of a fire with an EV.

‍

Those with a higher fire risk may be subjected to higher premiums or require additional coverage.

‍

And with battery degradation, a vehicle with a battery with a reduced capacity is seen as more likely to cause an accident due to the decreased performance capability, so again, a higher premium is charged to policyholders.

‍

As with any insurance policy, it’s always crucial for a policyholder to be aware of the risks associated with their car and what this means for their coverage.

‍

An insurance policy is a contract, after all, and no good has ever come out of blindly signing up for anything, especially insurance.

‍

A driver or vehicle owner should work with their insurance provider to understand their coverage options, ensuring they’re clued up and have the appropriate and adequate coverage for their cars to suit their driving habits.

‍

By working with an insurer to assess and mitigate such risks, you can enjoy the benefits of your coverage while protecting yourself and other drivers on the road.

‍

Cost Considerations

‍

The consensus is that electric cars and anything to do with them is costly; even a minor repair will have you paying through the nose.

‍

Surprisingly, with insurance, that’s not always the case.

‍

Firstly, electric cars are often cheaper to insure than petrol-powered cars in the long run. They have fewer moving parts in comparison; thus, fewer components may break or need replacing.

‍

In addition, most EVs are designed to be modular (substantial vehicle components are interchangeable), which can make repairs faster and more affordable.

‍

Secondly, EVs have various safety features, which is always a big plus in insurance. 

‍

Safety features such as automatic emergency braking, lane departure warning, and blind-spot monitoring can reduce the risk of accidents and injuries. 

‍

And as a policyholder, this may mean you get charged less for your premiums.

‍

Lastly, insurers may offer discounts for EV owners because of the above-mentioned safety features and perceived lower risk.  

‍

This could result in lower premiums, making it more affordable to insure an electric car than a fuel-powered one.

‍

Several factors, including vehicle price, battery cost, repair costs, safety features, and driving habits, play a part in the premiums one can receive for their EV. 

‍

Of course, this differs from traditional cars.

‍

Vehicle Price

‍

Because EVs generally cost more to purchase than fuel-powered vehicles, they’re more expensive to insure because their retail value is higher.

‍

Battery Cost

‍

Once again, one of the most expensive parts of an EV is the battery due to the metals and materials used to make it. As a result, insurance companies may consider the battery’s cost when considering insurance premiums. 

‍

Repair Cost

‍

EVs have more complex systems and need specialised skills, so they may be more expensive to repair than fuel-powered cars. Your insurance provider will likely consider this when it comes to premiums.

‍

Safety Features

‍

Safety features like emergency braking, lane departure warning, and blind-spot monitoring may help lower your monthly premiums as these features reduce accidents and injuries.

‍

Driving Habits

‍

EVs typically have a shorter driving range than fuel-powered cars, driving less frequently and for shorter periods. So, if your vehicle is barely on the road, it’s safer because it’s not interacting with other potential hazards.

‍

As an electric car owner looking for a good deal on insurance, start by comparing insurance premiums from different insurance providers to ensure you receive the best coverage and protection. 

‍

This exercise will allow you to research to fit the coverage most fitting for you.

‍

If you find that the premiums are a bit on the higher side, you can choose a lower excess to get a more affordable premium price.

‍

Additionally, be on the lookout for any discounts the insurance offers. 

‍

Insurance providers love to reward good drivers with a clean driving history with lower premiums, better benefits and discounts. But of course, you’d need to maintain a good driving record to benefit from any discounts.

‍

Lastly, insurers may also offer discounts for safety features and anti-theft devices, so as an electric car owner, you may want to consider equipping your EV with these features. 

‍

And What About Pineapple?

‍

So, now the question remains; is Pineapple one of the insurance providers that offer coverage for EVs?

‍

The short answer is yes. 

‍

However, we have a tiny clause you’d need to keep in mind. 

‍

As you’re generating a quote, our system scours through various vehicle models. If the system can find the make and model of your electric car, *we can insure it. 

‍

*Provided that the car’s maximum retail value has to fall below our sum insured limit of R1.2 million (including accessories). 

‍

If it costs more than this, unfortunately, we’re unable to assist you with comprehensive coverage.

‍

Conclusion

‍

So although Back To The Future’s ‘Doc’ Brown’ might have overestimated humanity’s scientific capabilities by a couple of years, the development of electric vehicles is still an impressive feat. 

‍

And while innovation is always an exciting time of progress and improvement, there’s no denying how scary change can be.

‍

Insuring an electric car comes with unique challenges that aren’t present in traditional petrol-powered vehicles. 

‍

These challenges include expensive repairs, higher replacement costs, and increased risk of electrical malfunctions. As an electric car owner, you must understand these challenges and ensure they have adequate insurance coverage to protect your investment. 

‍

Doing so gives you peace of mind to know your insurance will protect you in an accident or other unforeseen circumstances. 

‍

As the popularity of electric cars continues to grow, it’s becoming increasingly important for insurance companies and policyholders alike to stay informed and adapt to these ever-changing technologies and times.

‍

Secure peace of mind on the road ahead — Get your quote today and drive with confidence!

‍

Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply. Premium is risk profile dependent.

‍