The Rise of Electric Vehicles and What It Means for Insurance

As the UK accelerates towards its net-zero targets, the hum of electric vehicles (EVs) is becoming an ever-more-common sound on our roads. Here at WeCovr, an FCA-authorised expert motor insurance broker that has arranged cover for over 900,000 policies, we are witnessing this electric revolution first-hand. This rapid transition is not just changing how we drive; it's fundamentally reshaping the landscape of motor insurance in the UK.

WeCovr analyses the impact of EVs on premiums, claims, and cover options

The shift to electric power is one of the most significant changes the motor industry has ever seen. While drivers are drawn to the environmental benefits, lower running costs, and impressive performance of EVs, many are met with an unexpected hurdle: the cost of insurance.

In this comprehensive guide, we will break down everything you need to know about insuring an electric vehicle in 2025. We'll explore:

• Why EV insurance premiums can be higher than for traditional petrol or diesel cars.
• The legal insurance requirements for all UK drivers.
• The key differences in the claims process for electric vehicles.
• The specialist cover options you should look for in an EV motor policy.
• Actionable strategies to help you find the best value motor insurance UK drivers can get.

Whether you're a private car owner, a motorcycle rider, or a business managing a fleet of vans, understanding these changes is crucial to ensuring you have the right cover at the right price.

Why Are Electric Vehicle Insurance Premiums Often Higher?

It's the question on every prospective EV owner's lips: "If EVs are cheaper to run, why are they more expensive to insure?" According to the Association of British Insurers (ABI), the average cost of a comprehensive policy for an EV was 25% higher than for an equivalent internal combustion engine (ICE) vehicle in late 2023. The reasons are rooted in risk, repair, and replacement costs.

Higher Purchase Price and Insurance Groups

Insurers classify every car into one of 50 insurance groups. The higher the group, the higher the premium. This grouping is heavily influenced by the vehicle's list price. As of 2025, EVs still typically have a higher purchase price than their petrol or diesel counterparts. A higher value means a larger potential payout for the insurer in the event of a total loss (a write-off), pushing the vehicle into a higher insurance group.

Let's look at a common example:

Note: Prices and insurance groups are illustrative and can vary based on exact specifications and insurer calculations.

As the table shows, the electric versions sit in significantly higher insurance groups, directly impacting the base premium.

Specialist Repair Costs and Expertise

Repairing a damaged EV is not the same as fixing a traditional car. The technology involved requires a completely different skill set and workshop environment.

• Specialist Technicians: Mechanics need advanced qualifications, such as the IMI (Institute of the Motor Industry) TechSafe standards, to work safely on high-voltage EV systems. There is currently a national shortage of these qualified technicians.
• Specialist Equipment: Garages must invest in insulated tools, dedicated diagnostic equipment, and specific vehicle lifts to handle EVs safely.
• Longer Repair Times: Before any physical repair can begin, technicians must follow strict protocols to safely power down and isolate the high-voltage battery. This diagnostic and safety process adds significant time and labour costs to any claim.
• Parts and Supply Chain: The supply chain for EV-specific parts, from battery modules to complex electronics, is less mature than the one for ICE vehicles. This can lead to higher part costs and longer waits.

The ABI has noted that EV repairs cost, on average, 25% more and take 14% longer than repairs on equivalent ICE models. These increased costs are inevitably passed on to consumers through higher premiums.

The Battery: The Heart of the Cost

The lithium-ion battery pack is the single most expensive component in an electric vehicle, often accounting for 30% to 50% of its total value. This presents a unique and substantial risk for insurers.

Damage to the battery housing, even from a seemingly minor incident like hitting a kerb or road debris, can compromise its integrity. Insurers and repairers are extremely cautious due to the risk of "thermal runaway"—a rare but dangerous chemical chain reaction that can cause fires. If a manufacturer's guidelines state that a damaged battery cannot be safely repaired, the entire vehicle is often declared a write-off, even if the rest of the car is perfectly salvageable. This write-off risk is a major factor in the high cost of EV motor insurance.

A Lack of Long-Term Data

The insurance industry is built on vast amounts of historical data. For over a century, insurers have collected information on the accident rates, repair costs, and long-term reliability of petrol and diesel vehicles.

In contrast, mass-market EVs have only been on UK roads for a little over a decade. This means insurers have a much smaller pool of data to accurately predict future claims costs. In the face of this uncertainty, they tend to price policies more conservatively, leading to higher premiums until more robust historical data becomes available.

Understanding Your Motor Insurance Obligations in the UK

Regardless of whether your vehicle is powered by petrol, diesel, or electricity, the law on motor insurance in the UK is unequivocal. Under the Road Traffic Act 1988, it is a legal requirement to have at least third-party insurance for any vehicle used on public roads.

The Legal Minimum: Third-Party Only (TPO)

This is the most basic level of cover. It protects you against liability for:

• Injuring other people (including your passengers).
• Damage to other people's property or vehicles.

Crucially, TPO does not cover any damage to your own vehicle or any injuries you sustain in an accident that was your fault.

Stepping Up: Third-Party, Fire & Theft (TPFT)

TPFT includes everything covered by TPO, with two important additions:

• Cover for your vehicle if it is stolen.
• Cover for your vehicle if it is damaged by fire.

Again, it does not cover damage to your own car from an accident.

The Gold Standard: Comprehensive Cover

This is the highest level of motor insurance available. It provides all the cover of TPFT, plus:

• Cover for accidental damage to your own vehicle, even if the accident was your fault.
• Often includes other benefits as standard, such as windscreen cover and personal accident cover.

For a new or high-value vehicle like an EV, comprehensive cover is almost always the most sensible choice. Interestingly, due to risk profiling, comprehensive policies can sometimes be cheaper than TPO or TPFT, so it's always worth comparing quotes for all three levels.

Business and Fleet Insurance

If you use your vehicle for work-related purposes beyond commuting to a single place of work, you will need business car insurance. For companies operating multiple vehicles, a dedicated fleet insurance policy is essential. These policies are designed to cover the specific risks associated with commercial operations and can be tailored to include a mix of cars, vans, and specialist vehicles, including EVs.

Key Insurance Terminology Explained for EV Owners

Navigating an insurance policy can be confusing. Here’s a plain-English guide to the key terms you'll encounter.

• No-Claims Bonus (NCB) / No-Claims Discount (NCD): For every year you drive without making a claim on your policy, you earn a discount on the following year's premium. This can build up to a significant saving (often up to 60-70% after 5 or more years). You can often pay a small extra fee to "protect" your NCB, allowing you to make one or two claims within a set period without losing the entire discount.
• Excess: This is the amount of money you must contribute towards a claim. It's made up of two parts:
  • Compulsory Excess: A fixed amount set by the insurer.
  • Voluntary Excess: An amount you agree to pay on top of the compulsory excess. Choosing a higher voluntary excess can lower your premium, but you must be sure you can afford to pay the total excess if you need to make a claim.
• Optional Extras: These are add-ons you can use to enhance your policy. Common extras include:
  • Breakdown Cover: Essential for any driver. For EV owners, it's vital to ensure the cover includes running out of charge and recovery by a flatbed truck to avoid damaging the electric motors.
  • Legal Expenses Cover: Covers legal costs to help you recover uninsured losses (like your excess or loss of earnings) from a third party who was at fault.
  • Courtesy Car: Provides a replacement vehicle while yours is being repaired. Check the small print to see if an EV-equivalent is guaranteed.

The EV Claims Process: What's Different?

While the initial steps of reporting an accident are the same for any vehicle—stop safely, exchange details, take photos—what happens next can be quite different for an EV owner.

Accident Scene Safety

If your EV has been in a collision, particularly a serious one, be aware of the high-voltage system. While these systems are designed to shut down automatically in a crash, there is always a residual risk. Never touch any exposed orange or blue high-voltage cables. Inform the emergency services and your recovery provider that the vehicle is electric.

Specialist Assessment and Repair Network

Your insurer will direct you to an approved repairer. With an EV, this must be a garage with the correct IMI TechSafe certification. As the network of qualified EV repairers is still growing, your vehicle may need to be transported further than you would expect, potentially leading to longer overall claim times.

The Write-Off Decision

As discussed, the high cost and sensitivity of the battery pack mean that EVs are more susceptible to being written off. An insurer will declare a vehicle a "total loss" if the cost of repair is uneconomical compared to the vehicle's market value. For an EV, damage to the battery enclosure or chassis mounting points can quickly push the repair bill into write-off territory, a scenario confirmed by recent ABI data highlighting the growing write-off rates for newer, more complex vehicles.

How a Claim Affects Your Future Premiums

Making a fault claim will almost certainly lead to a higher premium at your next renewal. You will lose some or all of your No-Claims Bonus, and your base premium will increase because you are now seen as a higher risk. This financial impact can feel more acute for EV owners who are already starting from a higher premium base.

Specialist EV Insurance Cover: What to Look For

Not all comprehensive policies are created equal. When insuring an EV, it pays to look for a policy with features designed specifically for electric motoring. As an expert broker, WeCovr helps clients compare policies to find cover that includes these vital benefits.

EV-Specific Policy Features Checklist

When comparing quotes, don't just look at the price. Scrutinise the policy wording or ask your broker to confirm that these EV-specific protections are included.

Cost-Saving Strategies for EV Motor Insurance

While EV insurance can be pricey, there are plenty of ways to bring the cost down without compromising on essential cover.

1. Shop Around with an Expert Broker: This is the single most effective strategy. A broker like WeCovr does the hard work for you, comparing dozens of policies from mainstream and specialist insurers. We have access to deals that aren't available on public comparison sites and can help you find a policy that balances cost with the right level of EV-specific cover, all at no cost to you.
2. Increase Your Voluntary Excess: If you are a safe driver and can afford to pay a higher excess in the event of a claim, offering to do so can reduce your annual premium.
3. Pay Annually: Paying for your policy upfront in one lump sum avoids the interest charges that are added to monthly payment plans, saving you money over the year.
4. Enhance Vehicle Security: While most new EVs come with excellent factory-fitted security, adding a Thatcham-approved tracker can deter thieves and may earn you a discount from some insurers.
5. Be Accurate with Your Mileage: Don't overestimate your annual mileage. A lower mileage suggests lower risk, which can lead to a lower premium. Be honest, though, as providing false information can invalidate your policy.
6. Consider a Telematics Policy: "Black box" or app-based telematics policies monitor your driving style—including speed, braking, and acceleration. Good driving is rewarded with lower premiums, which is an excellent way for careful EV drivers to prove their low-risk profile to insurers.
7. Build and Protect Your No-Claims Bonus: Safe driving remains the best long-term strategy for cheaper motor insurance UK wide. The longer you go without a claim, the bigger your discount will be.

The Future of EV Insurance: What's on the Horizon?

The EV insurance market is evolving rapidly. Here are some of the key trends we expect to see in the coming years.

• Smarter Risk Pricing: As insurers gather more data on EV performance and accidents, their pricing models will become more sophisticated. Telematics will likely expand to include data on battery health and charging habits, rewarding owners who look after their vehicles.
• The Growth of Sustainable Repairs: There is a growing push from the ABI and the wider industry to make EV repairs more sustainable and affordable. This includes promoting the repair of battery packs at a modular level rather than replacing the entire unit, which will be key to controlling claim costs.
• The Impact of ADAS and Automation: Advanced Driver-Assistance Systems (ADAS) are already a factor in insurance ratings. As we move towards higher levels of vehicle autonomy, the question of liability in an accident—is it the driver or the software at fault?—will fundamentally change how motor insurance works.
• Flexible Policy Models: We expect to see a rise in more flexible insurance models, such as pay-per-mile or subscription-based cover, which could be particularly appealing to EV owners with variable driving patterns.

A Note for Fleet Managers: Insuring Your Electric Fleet

Transitioning a commercial fleet to electric presents unique challenges for motor insurance. Fleet managers must consider:

• Higher Vehicle Values: The higher capital cost of electric vans and cars will increase the overall value of the fleet, impacting premiums.
• Driver Training: Ensuring drivers are trained in efficient EV driving techniques (e.g., regenerative braking) and correct charging etiquette is vital for both safety and operational efficiency.
• Charging Infrastructure: Your insurance policy needs to account for risks associated with your depot's charging infrastructure.
• Specialist Vehicle Downtime: The potential for longer repair times for EVs means that business interruption cover and guaranteed EV-equivalent replacement vans are critical.

Working with an experienced fleet insurance broker like WeCovr is essential. We can help you structure a policy that addresses these specific EV risks, ensuring your business operations remain protected during and after the transition.

Frequently Asked Questions (FAQ)

Is car insurance more expensive for electric cars in the UK? Yes, currently car insurance for an electric vehicle is often more expensive than for a comparable petrol or diesel model. The primary reasons are the higher purchase price of EVs, the significant cost of replacing or repairing their specialist battery packs, and the need for specially trained technicians and equipment for repairs, which increases claim costs for insurers.

Do I need special insurance for my EV? Legally, you only need a standard UK motor insurance policy that provides at least third-party cover. However, a specialist EV insurance policy is highly recommended. These policies include crucial extra features not always found in standard cover, such as protection for charging cables, home wall boxes, and recovery if you run out of charge.

Will my home insurance cover my EV wall box charger? It might, but you must not assume it does. Some home insurance policies may cover the wall box as a permanent fixture, but others may specifically exclude it. The best and safest option is to choose a specialist EV motor policy that explicitly includes cover for your home charging unit against accidental damage, fire, and theft.

What happens if I run out of charge in my EV? If you run out of battery, your car will stop. A standard breakdown policy may not cover this specific situation or may only offer to tow you to the nearest garage, which is unhelpful. It is vital to have a breakdown policy or a motor insurance add-on that specifically includes "out of charge" cover, ensuring you will be recovered to the nearest compatible charging station.

The world of motor insurance is adapting to the electric age. While the current landscape presents challenges in the form of higher premiums, a deeper understanding of the risks and a smarter approach to buying cover can make all the difference. By prioritising policies with specialist EV features and using an expert broker to compare the entire market, you can drive into the future with confidence.

Ready to find the best value insurance for your electric vehicle? Get a quote from WeCovr today. Our FCA-authorised experts will compare policies from a wide panel of UK insurers to find the right cover for you, at no cost.