How does insurance work for electric and autonomous vehicles?

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There are special considerations when it comes to insuring electric and autonomous vehicles.

Autonomous and electric vehicles are still in their infancy in Australia, but it won’t be long before they are a common feature of our roads.

The number of electric vehicles (EVs) sold in Australia doubled in early 2021 versus 2020. In the UK, there are plans for the first fully-autonomous vehicle (AVs) to drive on public roads in 2022.

While it’s not yet legal for drivers to relinquish control of their car on main roads in Australia, state and territory governments are testing autonomous vehicles for shuttle buses and other uses. Many new cars already have autonomous features such as self-parking functionality.

Given their many differences to petrol- and diesel-powered vehicles, there are also special considerations when it comes to insuring EVs and vehicles with semi-autonomous features.

Chris Quick is the motor underwriting manager of specialist prestige vehicle underwriting agency Dawes. He explains EVs and AVs fall under regular motor vehicle insurance policies. “Most standard insurers and specialty insurers accommodate regular vehicles as well as EVs, hybrids and semi-autonomous vehicles, depending on their risk appetite.”

But, while policies are the same or similar for most vehicles, there are key differences when it comes time to repairing EVs and AVs after an accident. For instance, Tesla prefers cars are repaired by one of their approved workshops.

There’s only a handful of these repairers around the country, however, which adds to the cost of the claim, for instance for towing expenses. It also means vehicles are often out of action after an accident for longer than a regular car.

It’s a similar story for other car manufacturers. “Porsche has a network specialist repairers around the country that can repair the new hybrid Porsche Taycan. But the model is unique and only certain repairers have the facilities to repair them, especially for heavy structural or battery damage,” says Quick. Additionally, more than one repairer is often involved, for instance, one for structural damage and another to fix the electrics, which typically need to be reprogrammed after an accident.

“While policies are the same or similar for most vehicles, there are key differences when it comes time to repairing EVs and AVs after an accident”

For drivers, this means it’s important to check the policy’s provision for a hire car. Many policies will only cover the cost of two week’s hire car use, but it could take up to a month or more for the vehicle to be repaired.

The nature of accidents and their associated repairs also tend to be different given EVs’ and AVs’ different structures compared to regular cars. Quick explains insurers often write off Teslas if they are involved in an accident in which the heavy impact is to the right rear quarter panel, which is where the charging and battery points are located due to the large cost and structural repairs.

So it’s essential to understand how premiums work with EVs and AVs. They are typically more expensive, given claims are dearer than for a standard vehicle.

It’s vital to consider these issues if you’re thinking of buying a new car, given many vehicles come with semi-autonomous features such as sensors and cameras. In the future, EVs and AVs will be the norm rather than the exception on our roads. Until that happens, make sure you understand their special features and how that affects insurance when you’re choosing a new car and the policy you use to protect it.

Important note – you should consider the Product Disclosure Statement (PDS) in deciding whether to buy (or continue to hold) this insurance and also whether this insurance is appropriate for you. The PDS can be obtained from Dawes Underwriting Australia Pty Ltd (ACN 050 289 506, AR no. 342982). Various insurers issue this insurance. Policies differ between insurers. Deductibles/excesses, exclusions and limits apply.

The information provided here is general advice only and has been prepared without taking in account your objectives, financial situation or needs. Steadfast Group Ltd (ABN 98 073 659 677, AFSL 254928)


Important notice – Steadfast Group Limited ABN 98 073 659 677 and Steadfast Network Brokers

This article provides information rather than financial product or other advice. The content of this article, including any information contained in it, has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the information, taking these matters into account, before you act on any information. In particular, you should review the product disclosure statement for any product that the information relates to it before acquiring the product.

Information is current as at the date the article is written as specified within it but is subject to change. Steadfast Group Ltd and Steadfast Network Brokers make no representation as to the accuracy or completeness of the information. Various third parties have contributed to the production of this content.




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