We are seeing a lot of companies now consider making the switch to electric for their company vehicles. Whether this is based on environmental reasons, financial reasons or both, the technology is there. What’s more, the government incentives make this switch very attractive. So, what’s the downside?
Well, frankly, insurance is a bit of a minefield. The company motor fleet underwriters have, in general, not had the best of times of late, and they are very nervous when it comes to electric vehicles. Without decades of actuarial data, there is evidence that underwriters are slow to embrace the change and, in some cases, large underwriters are actively admitting to not wanting to underwrite electric vehicles, especially Tesla models.
We have expertise and detailed knowledge of all underwriters’ specific attitudes and strategies around electric vehicles and this allows us to navigate these discussions for our clients – so that they can make the switch / transition for the right reasons and not be put off by the wrong reasons. Insurance should be an enabler, not a reason why we delay our shift to this new technology.
The inertia in the motor fleet underwriter is driven by a few key factors that they ‘perceive’:
- Significant increase in repair costs in general
- The inability for their “repair network” to respond to repairs means that they can’t enjoy the low agreed rates for repairs, also meaning costs go up
- Increase in frequency of claims
- Delays in repairs and access to specialist parts – further increasing claim costs
- More complex builds can lead to more financial write off situations
- Nervousness around the driver assist technology – and potentially that increasing claims frequency
- Some repairs need to be manufacturer only, which can then incur delays (Tesla particularly)
- The ABI categories for motor vehicles is also artificially penal, and as underwriters rate using these, this is also a challenging factor
These perceived issues mean that underwriters can penalise companies for having electric vehicles, in a few different ways:
- Disproportionately high premiums for these vehicles
- Minimum driving ages – 25 or sometimes 30
- Much higher excesses – commonly £1,000 excesses
- Refusal to write a company’s fleet policy – reducing the market for companies who make the switch
Tesla specifically is cited as being a particularly troubling brand to insure, with some underwriters having extremely negative approaches. One underwriter, until recently, specifically would not insure any fleet of any size if it had a Tesla. This has since softened slightly to less than 10% of the total vehicles being Tesla might be acceptable. And they are not alone, a couple of household names specifically tell us they do not want to insure Tesla vehicles and will price them accordingly.
All of this noise is just that, but it is real, is does exist, and it makes finding solutions a bit harder than traditional combustion engine equivalents. But we have the knowledge that allows us to access solutions.
As specialists in the electric vehicle movement, we have our own data, our own dedicated claims process, including relationships with the manufacturers and access to a fleet of replacement like for like vehicles. This also means we can get favourable parts and repair slots. Our underwriters clearly appreciate this and therefore we have the ability to get the very best deals and cover for our clients.
Make the right decision – go electric, but trust in our expertise to help you find the right insurance partner.
If you would like to discuss your fleet solutions further, please book some time to meet with Gen2 Founder & Group CEO Jon Nottingham HERE or call him directly on 0754 551 4010 to discuss your electric company fleet.