Many individuals and companies are moving their vehicles from petrol or diesel models to electric vehicles (EVs). There are some things that need to be considered from a risk and insurance perspective however.
Whilst having an EV is considered to be a good thing from a sustainability perspective, and also reducing petrol costs, EVs come with risks that other vehicles do not.
Let’s talk about the batteries
The batteries in EVs have been highly talked about recently with stories of them exploding and therefore being a fire risk.
In New Zealand, there has only been six EV fires recorded, which is very low given that there are over 110,000 EVs in the country.
That said, it is important to try and reduce the fire risk for any electrically-based appliance – especially as the fires are so much harder to put out.
Here are some top tips to reduce EV fire risk -
- If you are a business, have processes around how EVs are charged on site. If possible, there should be a dedicated area away from buildings to reduce fire risks. There must however be a power supply that complies in that area to avoid the use of extension cords.
- Only use EV batteries and chargers that are compatible with the vehicle. If it is a company vehicle, ensure that your employees are aware of what chargers can and cannot be used – especially if they are taking the vehicle to their own residence.
- At home, ensure that your electrical system can handle the extra load of charging an EV and that the vehicle is not being charged near any materials that are flammable.
- Don’t store old batteries anywhere and safely dispose of them. Whilst there have only been six EV battery-related fires, there have been 15 fires in rubbish trucks where it is believed that lithium-ion batteries were the cause.
Other risks to consider
In addition to the batteries and potential fire hazards, there are other risks to be aware of when it comes to EVs -
- Charging cables can of course be a tripping hazard. Never use an extension cord and ensure that any cables, especially in public areas, are taped down. Left unchecked this could cause an accident, even making you publicly liable under the Health & Safety at Work Act 2015.
- As with many vehicles now connected to software and the internet, EVs are exposed to cyber risks. Remote hacking, for example, would enable access and control of the vehicle as well as the ability to steal data and/or infect the system with malware or ransomeware.
- Although fairly unusual, EVs have been known to give people an electric shock. This is typically caused by water exposure, damaged equipment, or poor grounding. To mitigate this risk only use certified and properly installed charging equipment, and when charging outdoors, use rubber soled shoes to protect against an unexpected grounding issues. Be cautious in wet conditions and avoid charging in heavy rain.
Insurance cover and costs
Many people wonder if EVs are more expensive to insure.
In general, the costs are not that much higher than other vehicles as the weighting of the premium is on the driver as well as the model and make of the vehicle.
Because EVs are at a higher price point however, this will factor into the insurance premium costs.
When you are looking at an EV insurance policy, there are some things to note -
- Just as with other motor vehicle policies, battery failure is not usually covered. This is different however if the EV has been damaged in an accident or fire.
- Some policies will cover the charging cables and wall charging unit, but others may not. For those that don’t, you would need to check and see if there is cover under your contents insurance policy.
- Not all insurers will even cover EVs. This is where a broker can help by being able to identify the ones that will cover the vehicle you have purchased.
Check before you buy
Before you buy an EV, especially if you are considering them for fleet vehicles, it is worthwhile having a chat to us first so that we can help inform you about the costs of insurance and whether there is the right cover for the vehicles you are looking to buy.
We are here to help and advise as needed.
Drop us a line on 0800 644 444 or insurance@icib.co.nz.
