Growth Opportunities in EV Insurance Write-Offs in NA & Europe

Growth Opportunities in EV Insurance Write-Offs in NA & Europe

Battery Safety Concerns, Nonstandard Vehicle Designs and Complex Repair Procedures are Top Challenges. Strategic Partnering among OEMs, Insurers, and Repairers will be Crucial to Reducing Premature EV Write-offs.

The study provides an overview of insurance and repair processes when an electric vehicle (EV) is damaged in an accident.

Covered regions include North America (the United States and Canada) and Europe (including the United Kingdom). The key challenges that repairers and auto insurers face when repairing an electric vehicle and the factors that increase EV insurance premium costs are discussed. Regulatory measures and OEM initiatives in North America and Europe that will reduce EV repair costs in the future are also included. Rising consumer awareness, government regulations, and subsidy programs boost the adoption of EVs worldwide. This, in turn, will lead to an increase in EV road accidents and EV-specific insurance claims year over year. Batteries, inverters, and charging units are critical EV components. A minor collision or damage to these components will raise concerns around ignition and safety, leading to repairs/replacement. OEMs do not follow a standard procedure that will ensure the quality and safety of a repaired EV battery. Any negligence during the repair process could lead to short circuits, fire, or explosion, and make repair shops liable for damages. Authorized parts availability, costly battery and electrical parts, quarantine requirements for damaged battery storage, additional labor hours required for EV repairs, and the lack of standard repair procedures contribute to the higher claim severity cost of EV batteries and increase the possibility of write-offs. OEMS must train dealers, vehicle damage assessors, and technicians on vehicle architecture, wiring structure, and battery pack design to improve repair efficiency and safety. OEMs such as Nissan, GM, Ford, and Tesla have initiatives in place to simplify battery design and introduce EV battery repair kits. They are also making EV replacement parts available through their authorized repair shops. Governments in Europe and North America are creating regulatory frameworks to give third-party vehicle service providers access to vehicle data. Such initiatives will expedite replacement or repair services and reduce the possibility of premature EV write-offs in the future.