As insurance industry considers risks
If you drive an electric vehicle or are maybe thinking of getting one for a loved one in the upcoming holiday season, you’ll soon have more places to charge them along the way. But as these “EV” vehicles as they’re called grow in popularity, the insurance industry is still figuring out the finer points of risk and auto insurance coverage in the future.
Washington last week approved almost $72 million for more EV charging stations in Florida. It’s part of a nationwide plan to add a half-million charging stations across 53,000 miles of interstate highways. Florida’s share will amount to 6,772 public charging ports along 6,244 miles of highway. This is on top of the 34 fast-charging stations the 2020 Florida Legislature approved at a cost of $8.6 million.
There’s no doubt that EV’s are growing in popularity, boosted by growing state and federal directives to phase-out traditional gasoline internal combustion engines. California recently announced it will transition to all EVs by 2035, with some other states expected to follow suit. Ford Motor Company announced last year that it would sell nothing but electric passenger vehicles in Europe by 2030.
All the buzz (pardon the pun!) is pushing the insurance industry to more fully consider how risk, coverage options, and liability may change with more EVs on the road. Because the vehicles cost more, rates average 13% to 15% higher. Repairs, too, are more costly given the relatively new technology, fewer repair shops that handle EVs, and limited parts right now.
“It’s challenging for insurers because this isn’t an area that traditionally had been a focus,” Sandee Perfetto, senior director of Personal Lines Core Products and Underwriting Solutions at Verisk, recently told InsuranceNewsNet, in this comprehensive article. “So this is an area that we definitely are engaging with insurers on and trying to get their focus on and feedback around where the coverage for these risks really belong.”
Perfetto said that some cases of battery fires and the ongoing risk of cyber-attacks to anything that can be plugged-in or connected to the Internet are among the list of variables that insurance companies need to consider going forward.
LMA Newsletter of 9-19-22
