EV Batteries Still A Great Concern For Insurers

Thatcham Research has stated that a lack of data on EV batteries continues to present problems for insurers who are obliged to write off EVs after minor accidents, possibly jeopardising EV adoption.

In a report titled “Impact of BEV Adoption on the Repair and Insurance Sectors,” which the UK Government’s innovation agency Innovate UK funded to examine differences between EVs and fossil-fuel models, the British automotive risk intelligence company cited a “concerning lack of affordable or available repair solutions and post-accident diagnostics.”

Insurance companies have complained that many EVs lack the ability to assess even slightly damaged battery packs after accidents, causing them to write off cars with low mileage. This results in increased premiums and reduces the benefits of switching to electric.

A replacement battery might cost more than the used price of the car after just one year, making it uneconomical to replace them. Batteries can account for up to 50% of the cost of an EV.

Head of engineering research at Thatcham, Adrian Watson, stated that in a perfect world, insurers might decide whether to repair or write off EVs based on information about their condition following an accident.

Even though the percentage of electric vehicles on British roads is just about 1.65%, Thatcham reported that EV-related insurance claims are already 25.5% more expensive than their fossil-fuel equivalents and take 14% longer to repair.

Damaged EVs that are awaiting repair must be stored outside at a minimum distance of 49 feet from other items due to their potential fire hazard.

According to Thatcham, just two EVs might be properly quarantined in an outside facility that can currently house 100 fossil-fuel vehicles.

Back here in Malaysia, around 2,631 EVs were sold last year which was an 860% increase from the 274 sold in 2021. In January, JPJ reported that more than 10,000 fully electric vehicles were registered in their database. However there is little to no data available on accident and write off rates involving EV’s.

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