Olivier Moustacakis, co-founder of Assurland.com (an insurance comparator), is unanimous when asked about the cost of an insurance policy for a battery-powered vehicle: “Electric vehicle insurance is more expensive because few vehicles are on the road today. It is also because, on large SUVs or Teslas, the loss ratio is rather high, while cars, some of which are made of aluminum, cost more to repair. Making quotes online would however tend to prove the manager of Assurland wrong: 24 € difference per year to the advantage of the Peugeot e-208 Active Pack compared to the same one equipped with the 100 hp PureTech engine, according to a quote made with a mutual insurance company. Ditto with a competing mutual.
But, there is a but”. Since January 2021, the government has given a boost to electric mobility by suspending for three years the special tax on insurance agreements (TSCA), i.e. until December 31, 2023. This rebate is far from being symbolic: it represents a 33% discount on civil liability and 18% on guaranteed damages. Example: for a Peugeot e-208 Active Pack, an annual premium of €671.40 is offered for comprehensive insurance (€695.80 for the petrol version). But, if we ignore the tax rebate, the price of civil liability goes from 238 to 316.50 € per year. Similarly, guarantees increase from €432.80 to €510.70 per year. Which would ultimately amount to an annual premium of €827.20 on the e-208, or 18.8% more than for the thermal Peugeot 208. So much for an entry-level vehicle.
Loss rate still low
When the same exercise is carried out for a Tesla Model 3, even before the selling prices have just started to rise again, the matter takes on a whole new dimension. The site of this mutual does not want to hear about it: “Your request is a bit specific, would you like to be called back by an advisor?” we invariably read. A competing mutual agrees to carry out a simulation with an entry-level Tesla Model 3. The annual all-risk premium offered is 8.4% more expensive than for a 184 hp BMW 320i Lounge, whose sale price and segment are nevertheless similar. “There are fewer claims on electric vehicles because they drive less, which could help offset repair costs, which are more expensive. But the population that buys this type of vehicle today is not necessarily representative of all motorists. When the use of the electric car will be generalized, the loss ratio will mechanically increase and, as the repair costs are higher… this will influence the prices”declares Thierry Cassagnères, the director of the compensation of the insurer Generali.
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Performance that weighs in the balance
But, in addition to the price of mechanical interventions and therefore repairability, another factor seems to influence insurers, according to a study by Axa Switzerland carried out in 2019: “The frequency of claims for more powerful models, in the luxury and SUV categories, is around 40% higher. According to specialists, the acceleration of electric cars partly explains this phenomenon”, is it indicated. The electric motor provides all of its torque instantaneously, a fact inherent in this type of technology. And offering high power is also a way of justifying the higher price of electric vehicles, even if this performance bears little relation to the real needs of motorists. But by doing so, manufacturers, Tesla in the lead, are creating machines with performance that everyone may not be able to understand.
The price of uncertainty
The list of causes for more expensive insurance for electric vehicles does not end there, however. For the Swiss company Zurich, “with these new vehicles, and particularly with new manufacturers, there is an increased risk of longer repair times due to limited access to spare parts or the occurrence of a problem. unexpected during the repair”. Thereby, if the insurance of so-called green vehicles is more expensive, it is also because insurers speculate on possible problems that could arise. “We have decades of make and model data so we know average repair costs; this helps insurance companies price coverage. Without this data, companies may have to include uncertainty in the amount of the premium, because they do not know what the cost of the risk will be”, concludes in Consumer Reports Lynne McChristian, director of the office of research on the insurance at the University of Illinois (USA).