EV cover update

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【Summary】John Lewis Financial Services has temporarily stopped offering insurance to electric vehicle (EV) drivers. The department store's lending arm halted new policies and renewals earlier this year due to a decision made by its underwriter, Covéa. The insurer wanted to analyze the risks and costs associated with EVs. The review is still ongoing, and the decision comes at a time when insuring EVs is more expensive than petrol or diesel cars.

FutureCar Staff Nov 23, 2023 10:15 PM PT

John Lewis Financial Services has provided an update regarding its temporary suspension of insurance coverage for electric vehicles (EVs). The department store's lending arm had stopped offering new policies and renewals for EVs earlier this year due to a decision made by its underwriter, Covéa. The underwriter wanted to assess the risks and costs associated with insuring EVs. John Lewis stated that the review of the situation is still ongoing, and the next steps are being determined by Covéa.

In April 2021, Covéa entered into a five-year motor insurance partnership with John Lewis, where the department store markets car insurance while Covéa provides policy administration, underwriting, pricing, and claims service. The decision to halt coverage for EVs by the insurer came at a time when the cost of insuring these vehicles is higher compared to petrol or diesel-powered cars. According to data from Confused.com, EV drivers have experienced a 72% increase in insurance costs, while motorists with internal combustion engines (ICE) have seen a 29% increase. Insurers face challenges in pricing premiums for EVs due to their limited experience in this emerging industry.

Motor insurance expert Louise Thomas explained that one of the reasons for the higher premiums is the unfamiliarity of driving an EV. Instant acceleration and different braking mechanisms can take drivers some time to adjust to. Additionally, the quietness of EVs poses a potential danger as it may lead to more accidents. Insurers are concerned about the increased number of claims resulting from these accidents, which would inevitably result in higher premiums.