South African car insurers provide electric vehicles (EVs) the same comprehensive cover that they afford to cars with internal combustion engines (ICE), but there’s one exception that EV owners should all be aware of.
According to a report by MyBroadband, many local insurance companies do not currently have any differences in their rating system for EVs compared to ICE models, but they may not pay out for damages caused as a result of failures on the electrical grid.
This was the shared consensus among several of the nation’s largest insurers, including Hollard Insurance, Naked Insurance, OUTsurance, and Santam, all of whom said that they provide the same cover for EVs as ICEs and that their premiums do not include any additional fees that are not charged on petrol or diesel models.
When an insurer won’t cover EV damages
A spokesperson from Santam said that there is currently no difference between the rating factors of EVs and conventional cars, but that the company is monitoring trends to see if there is a material difference in the risk they present.
Despite this, in 2023 all of the country’s major insurers included an exception in their policy stating that a claim may be rejected for incidents related to total grid failure.
Battery-electric cars need to be plugged into a power source to charge, often for long periods overnight, which presents a risk that the battery may be damaged by a power surge.
According to Naked, the damage caused by a normal surge, such as the ones that occur when the power is turned back on after load-shedding, would typically be covered.
However, they will not cover the gradual wear and tear that a battery experiences as a result of frequent power cuts.
Motorists are advised to check that their EV’s policy explicitly covers the battery and to understand the conditions for it.
Insurers typically will pay for the battery for unexpected damages similar to other types of vehicles, but will not cover degradation as a result of time or frequent power outages.
You should also determine if the policy covers charging equipment and if the policy covers electrical surges.
On a related note, it’s worth checking your car’s warranty, as most automakers include a separate battery warranty on their hybrids and EVs that is longer than the standard drivetrain warranty, and it’s a good idea to investigate if the original equipment manufacturer (OEM) has an option to extend this warranty.
Another important factor to consider is your roadside assistance plan, as it’s worth knowing whether your insurance provider is able to provide specialized assistance for EVs such as towing it to the nearest charger.
Finally, it is paramount that you confirm the value of your EV with your insurer, as they typically depreciate faster than an equivalent ICE model, so you’ll want to be sure of the value that the provider is using to calculate your coverage.
EV owners don’t pay a premium for fire hazards
There is a commonly held belief that EVs are much more susceptible to fires than their ICE counterparts and that they have much higher insurance premiums as a result, but this is not the case.
In fact, a study from the Swedish Civil Contingencies Agency found petrol cars were 20 times more likely to catch fire.
The perception around EV fires has to do with the fact that their large batteries are more susceptible to thermal runaway, making them much harder to put out.
The burnt wreck of the Rimac following Richard Hammond’s crash in 2017.
One notorious example was when The Grand Tour presenter Richard Hammond crashed the Rimac Concept One at a Hill Climb event in Switzerland, which led to the car burning for five days straight as the cells in the damaged battery burned and damaged adjacent cells, causing it to ignite multiple times.
Another case involved a Porsche that caught fire on a cargo ship that led to hundreds of other cars being destroyed, but while these events are dramatic and tend to draw a lot of media attention, the reality is that these situations are rare and insurance companies do not put a premium on EVs because of this risk.
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