EVs and E-scooters: Which Insurance Impacts Hover in the Wings?

The UK is said to be on the cusp of a transport revolution, with electric vehicles (EVs) very much the future and micro-mobility-level eco choices also potentially being transformative. Much thought is required, however, especially from an insurance and risk perspective.

The evolution of transport, ahead of a ban on launches of new petrol and diesel cars from 2030, is bringing new challenges to the risk landscape, which need to be understood by owners, garages and breakdown services, those providing charging points and also insurers. Sales of electric vehicles rose by 43% in 20201, with owners estimated to generate 17-30% fewer emissions than those produced by a vehicle with an internal combustion engine (ICE).2

Electric cars, because of their batteries, are more likely than an ICE-powered car to experience fire damage as part of a claim. Their lithium-ion batteries – the ‘fuel’ in

EVs – can combust, if damaged, which could occur as a result of an accident, through being overcharged, being exposed to high temperatures or because of a latent manufacturing defect.

This fire risk has to be carefully controlled, but great care is required, as such fires emanate from a high-voltage battery, which also carries with it risks of electric shock.

The fire risk posed is not just to the vehicle, but to any property at which the car is being charged and public spaces, too, such as car parks, shopping centres, service stations and hotels. As the degree of fire risk becomes better understood, this

could not only mean higher insurance premiums for the vehicle’s insurance but also the potential for property and liability claims, which also exert upward influences on premiums.

What is already understood is that, if repairs to an EV are required, the cost and time involved can be far more significant than with a traditional vehicle repair, particularly as many garages will currently not necessarily have a high degree of expertise when it comes to EV repairs, and may not have the right parts or tools, either. Mechanics will either evolve into ‘technicians’, by becoming accredited to BS 10125 Vehicle Damage Repair Kitemark Scheme standard, or potentially only ever train in EV repair and work for EV-only specialist repair centres.

EVs are more complex in construction than traditional vehicles, having integrated components connected through sensors and embedded software. This makes repairs trickier and longer. A whole new skill set will be required of repair shops, and a garage will need to future- proof itself in this regard, if it is to be sustainable within what will become a new-look repair network.

During any repair, an EV’s battery has to be decommissioned before work

can start, as it is a live unit that could cause electrocution, if touched whilst still charged. This decommissioning and then subsequent recharge, following the repair, adds to the time the vehicle is off the road, which has the potential to greatly increase the costs of hire charges within an insurance claim and impact on the level of future premiums paid. It could also mean garages needing space to ‘hold’ vehicles for far longer.

As the battery is the main vehicle component, any accident-related damage to it could also lead to the car being written off entirely. Repair may not be feasible, from a cost perspective.

After any road accident, it is important a triage procedure be undertaken, so anyone tackling the breakdown is kept safe from the risk of electrocution, explosion or the risks posed by leaking electrolyte. Safety with regard to hazardous components should also be exercised in the garage, with safe disposal of traction battery packs being paramount. Whilst an EV battery should last 15-20 years, replaced units will need to be disposed of with care, in an eco-friendly manner, so any further energy benefits can be derived from them.

EV driver training is required, especially in a commercial fleet. The daily ‘walkaround’ checks are different for an electric vehicle, and on-road driving also requires new skills. Drivers need to learn to control the instant power and acceleration that comes with an EV, whilst stopping distance planning needs to be tackled in a new way. Battery life has to be nurtured through better driving, with speeding likely to considerably reduce the lifespan of an EV.

Additionally, drivers of pre-July 2019 EVs need to remember these vehicles are silent when being driven at lower speeds or when reversing, so pedestrians and cyclists, in particular, are at greater risk of not being aware that a vehicle is nearby or performing a manoeuvre. Noise-emitting devices only became compulsory on models, produced after this date. Such devices will now be applied to hybrid models too (as of 1 July 2021), to enhance safety.

This silent operation is one reason why there is also concern amongst insurers and the general public with regard to e-bikes and, particularly, e-scooters.

Privately owned scooters are currently illegal for use on public land. As their popularity soars, concerns grow around public awareness of the legal standpoint on their usage. The Metropolitan police in a clamp down seized over 500 e-scooters in a week.3

The legal position on UK e-scooters

While it is legal to sell and purchase an e-scooter in the UK for personal use, they cannot be legally ridden on public land (roads, cycle lanes or pavements), unless the e-scooter is part of new trials where road and cycle lane use is permitted.

Some of us may currently see e-scooters on the road as part of

these trials. This is due to an extension of Government trials to assess their safety, from August 2021 to March 31, 2022.4 E-scooters will be seen on roads in 57 locations (50 towns and cities) in England, from Barnstaple to Newcastle, and within several London boroughs, until that date.5

Campaigners for safety believe the risks for vulnerable road users, such as the blind and disabled, are significant from these devices, which are allowed to travel at 15.5mph (12.5mph in London). Reports suggest that e-scooter riders have generated hundreds of complaints already and been used in assaults, incidents of anti- social behaviour, burglary and traffic offences. Safety organisations also want the minimum age of an e-scooter rider raised from 16 to 21.

Tailored e-scooter insurance is available and highly recommended, as is the wearing of a helmet, to help reduce the risk of head injuries. With liability claims a constant possibility, however, insurance is not just for the micro-mobility eco-vehicle or the rider, but for third-party damages, too.

It will be watch this space on premiums, should the liability claims of uninsured e-scooter riders have to pass to the Motor Insurance Bureau and be handled via the Uninsured Drivers Agreement.6 The potential for that scenario to increase the cost of cover across the motoring spectrum is also a real one, if shorter post-pandemic commuting journeys, under the ‘steam’ of an e-scooter, become attractive alternatives to the car, bicycle or weekday walk.

1 Page 8 – https://view.publitas.com/biba/a-biba-brokers-guide-to-the-future-of-mobility-ldjyod7e6oxg/page/8-9 

2 Returning to the roads – https://www.allianz.com/en/press/news/studies/200615_Allianz-AGCS-electric-vehicles-report-evolution-of-mobility.html

3 https://metro.co.uk/2021/06/24/more-than-500-e-scooters-seized-by-police-in-london-in-a-week-14825314/ 

4 https://www.rac.co.uk/drive/news/motoring-news/dithering-and-delay-on-e-scooter-trials-prompts-new-safety-fears/ 

5 https://mindthezag.com/places/where-are-the-uks-e-scooter-trials/ 

6 Page 23 – https://view.publitas.com/biba/a-biba-brokers-guide-to-the-future-of-mobility-ldjyod7e6oxg/page/22-23