The automotive industry is betting its future on the widespread adoption of electric vehicles. But what are the risks involved as more EVs take to the highways? An industry expert looked at what the electric revolution could mean for insurance at a recent webinar by the Society for Insurance Research.
Devin Lindsay, principal analyst for automotive at S&P Global Mobility, discussed some of the risks involved with EVs.
More research must be done as more electric vehicles hit the roads, Lindsay said. He cited research from the Highway Loss Data Institute that said crash avoidance features in EVs seem to benefit young drivers more than other drivers. The institute also found that as vehicles aged, conventional gasoline-powered vehicles were more likely to be totaled, while EVs had relatively fewer front-impact claims but more rear-impact claims.
Researchers also looked at safety, maintenance costs and accident repair costs between gasoline-powered vehicles and EVs, Lindsay said. They found:
Electric vehicles have no engine damage in front-end collisions.
Gasoline-powered vehicles are more expensive to maintain than electric vehicles.
But electric vehicles are more expensive to repair in the event of an accident. They feature more lightweight components and panels to offset the weight of the battery, increasing repair costs. In addition, repair shops must invest in new equipment and training for mechanics to repair electric vehicles, as well as face increased replacement part costs and increased wait times for parts.
One quandary for insurers, Lindsay said, is the electric vehicles tend to be heavier than gasoline-powered vehicles but also have increased performance, which is not the combination for safety purposes. That combination of speed and weight impacts the safety of those in lighter gasoline-powered vehicles as well as pedestrians and bicyclists, he said.
Insurers also must consider what Lindsay called the “good sociology” that widespread adoption of electric vehicles will bring about. Will there be enough charging stations available? Will they be located in remote areas or mainly concentrated in cities and suburbs? What about the theft rates of EVs?
“Consumer ‘buy-in’ of electric vehicles should not be taken for granted. The insurance industry will have a tremendous impact on the perception and cost of ownership of electric vehicles,” he said.
Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents’ association and was an award-winning newspaper reporter and editor. Contact her at Susan.Rupe@innfeedback.com. Follow her on Twitter @INNsusan.
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