Electric vehicle popularity surges – what challenges does this pose for insurers?

Online electric car queries rose by 162 per cent after the government proposed to halt petrol and diesel sales by 2035 in February. This renewed customer interest comes as sales of electric and hybrid models continue to climb in Britain.

But what does this mean for the car insurance industry and warranty providers of this alternative fuel – lithium-ion batteries?

Lithium-ion batteries pose their own unique risks, as a high-powered, high-voltage power source.  Whilst there is a potential risk of fire or electrocution from these batteries, especially if damaged, this is countered by advance levels training and the correct equipment for handling and storage.

There are also hazards connected with electric vehicle charging infrastructure – for example, as cables from power points trail across walkways. Yet technology is already making advances – Oxford City Council trailblazed a type of ‘pop up’ charging point which would rise from the ground when needed, so no trailing wires.

There is also another challenge for insurers, which comes when batteries reach the end of their useful life.  A report earlier this year suggested that the UK was looking at a battery waste mountain when EV cars came to the end of their use, and implied that recyclers were not ready to handle the waste materials, which was not entirely accurate. Some waste management providers are already equipped with highly-trained teams to transport and decommission accident damaged electric vehicle batteries.

In addition, undamaged lithium-ion batteries can be reused and converted to store renewable energy. It is in this field that Altelium’s insurtech, which uses real-time data, can help insurers understand battery performance.

The platform monitors battery and user behaviour to record the health of batteries in electric vehicles as well as wind turbines, machinery and stationary storage. It’s team of data scientists complements the real time data with laboratory gathered information to understand the details of the first and second lives of batteries.

Unlike traditional lead batteries which have a raft of industrial standards, developed over many years, EV vehicle batteries are evolving fast. Until now the depth of information needed to underpin warranty and insurance decisions has not been available.  Altelium plugs that gap, and help insurers develop solid terms for warranties and insurance cover based on key performance standards and state of battery health.

About the Author

Jessica Friend