Insuring electric vehicles often costlier than for comparable gasoline cars

Electric car being recharged.
Electric car being recharged. Source: Goran Horvat / Pixabay

Electric vehicles often carry with them higher insurance premiums, and for a variety of reasons, some of the major insurers operating in Estonia say.

Factors include their greater mass, higher repair costs, and high intensity usage given that their limited range sees them confined to the environs of towns and cities, often as taxis, more than their fossil-fueled brethren

Triin Kääramees, product development manager at insurer Iizi, told AK that: "The prices quoted from some insurers are on average 20 percent more expensive for an electric vehicle compared with a gasoline vehicle, sometimes even more thatn that. From the point of view of these insurers, it seems electric cars are more likely to get involved in an incident."

Kääramees told ERR that the prices provided by different insurance providers can differ widely, adding that some companies also take into account vehicle fuel type when pricing for standard mandatory traffic insurance.

Not all insurers do so, Kääramees added.

Meanwhile Reet Veilberg, risk manager of vehicle insurance at If Insurance, said the loss rate for electric cars runs at about 20 percent higher than that of cars using an internal combustion engine, ie. gas or diesel, a trend also observed in the Nordic countries, she said.

That said, there are so many variables, Veilberg added, that providing an accurate comparison of how costlier insuring e-vehicles can be, is not viable.

Iizi vehicle insurance product development manager Kristiina Kivilaan also noted that the size of insurance premiums is not solely predicated on whether a vehicle is powered by electricity or other fuel.

Other key factors include the driver's accident history, as well as their age etc., and repair costs for the insured vehicle

Here, Kivilaan said, e-cars can be costlier to insure, as repairing them after an incident can be more expensive than is the case with gas and diesel vehicles.

Kaido Naarits, head of vehicle insurance portfolio at ERGO, agreed that, all things equal, insuring an e-vehicle was measure-for-measure more expensive than a gas or diesel vehicle, when talking about family cars.

Another interesting factor of note which Naarits highlighted was that the short-range e-cars have, compared with the ranges fossil fuel vehicles can enjoy before having to be refueled, means that e-vehicles tend to be used more in towns and cities.

"However, accidents are more frequent in denser city traffic," he added.

According to Naarits, it remains difficult to assess the behavior of Estonian people behind the wheel of electric cars, because their market share is still low, while the lion's share of those e-cars which are in use tends to fall on activities with more intensive activities, for example as taxis.

Ultimately, the person behind the wheel is the most significant single factor, he added.

Car expert Arno Sillat told ERR in July that the average electric car in 2022 cost €70,000.

This year, the most purchased electric car has been the iconic Tesla, whose prices start at €40,000 when new.


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Editor: Andrew Whyte

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