A January 2023 report from German insurer Allianz covered an interesting range of evidence about types of damage and repair costs for EVs.
Analysis of German insurance claim data showed that EVs have consistently lower claims due to damage from theft, fire and flood, but with more expensive claims resulting from accidents. This study found that the average claim for a EV is about 18% higher than for ICEs in the data sample. Some of the added costs of repairing EVs was due to higher labour costs at specialised repair shops.
The battery accounts for about 30% of the cost of an EV, so is protected extensively but often not sufficiently for damage to the underside of the vehicle. The Allianz data showed that the majority of high-cost repairs involved batteries and cars operating at relatively low speed. Significantly higher proportion of damage to EVs was found to occur in car parks and garages, specifically damage during parking and manoeuvring. Damage to EVs tended to be relatively less severe or from serious accidents compared with ICE vehicles, which may reflect the prevalence of driver assisted technology.
This study highlights how decisions made by the car manufacturer can have a major influence on the insurance pricing and claims experience. The car manufacturer has its own incentives, which may not necessarily promote ease of repairs, repair processes and spare parts costs. The car manufacturer can reduce the nature of damage and its cost to repair, through structural features of the car.
The concept of ‘repair-friendly’ manufacturing is gaining new focus in the case of EVs. Battery damage (or suspected battery damage) due to underside impacts has been determined to be a main cause of added repair costs. Measures to address repairability and protection of the battery will therefore have a significant impact on repair costs and hence insurance premiums.