Could Car Leasing be the Swiftest Path to an Electric Vehicle Fleet?
In the rapidly evolving world of electric vehicles (EVs), leasing schemes like Motability are playing a significant role in making EVs more accessible to a wider audience, including disabled consumers. This surge in EV adoption, however, has introduced new complexities for the insurance sector.
Traditional risk assessments remain in place for EV drivers, particularly those with alcohol or drug convictions. Insurers, while integrating EV-specific considerations such as higher repair costs and battery coverage, continue to perceive these drivers as higher risk. As a result, policies for such drivers can be more expensive or harder to obtain.
Leasing companies are responding to this trend by collaborating closely with insurers to develop tailored products that balance risk and accessibility. Some leasing firms are even offering insurance-inclusive lease packages, considering the unique risk profiles of EV drivers. However, drivers with serious convictions may still face higher premiums or restrictions.
The global EV market, influenced by factors such as US policy rollbacks and European progress, impacts the scale at which leasing companies and insurers operate. This, in turn, can affect premium pricing and risk pooling.
In the UK, the first half of the year has seen the Battery Electric Vehicle (BEV) share hit 21.6%, with enquiries for EV vehicles expected to increase as more businesses and consumers make the switch towards electric. This growth is reflected in the insurance sector, which faces challenges with battery pack powered cars due to their higher repair costs and potential fire risks.
In response to these challenges, insurers are innovating specific EV insurance products. For instance, the Motability scheme often insures up to three drivers on one car, allowing for data stacking and telematics assessment of risk per driver, per mile, divided by location, time of day, and speed.
Cities like Coventry and London are leading the way for EV charger infrastructure, with the government's Local Vehicle Infrastructure (LEVI) fund set to expand EV charger networks across the UK. Continued government investment in charging infrastructure and EV incentives is crucial for maintaining the momentum of EV growth in the leasing sector.
In other news, some car insurance companies in Ireland are planning to refund drivers due to COVID-19, following a similar move by Admiral in the UK. The refund by AXA in Ireland will cost approximately 20 million euros.
In conclusion, while the leasing sector is actively adapting to EV growth through product innovation and insurer collaboration, insurance for those with substance-related convictions remains a challenge due to inherent risk, even as EV use expands via leasing and Motability schemes.
- The insurance sector has started developing tailored products, such as Motability's insurance scheme, to cater to the unique risk profiles of electric vehicle (EV) drivers.
- Telematics assessment of risk, per driver, per mile, divided by location, time of day, and speed, is being utilized in the Motability insurance scheme to insure up to three drivers on one car.
- Sports cities, like Coventry and London, are leading the way for EV charger infrastructure expansion, supported by the government's Local Vehicle Infrastructure (LEVI) fund.
- The growth of electric vehicle use through leasing and Motability schemes is a significant driver for the expansion of finance, technology, lifestyle, business, sports, and weather-related industries, as they adapt to the changing transportation landscape.
