John Lewis provides update on EV cover pause

author: FutureCar Staff    

John Lewis Financial Services has provided an update after temporarily suspending insurance coverage for electric vehicles (EVs). Earlier this year, the department store's lending arm announced that it had stopped offering new policies and renewals for EVs due to a decision made by its underwriter, Covéa. The reason behind this decision was Covéa's desire to assess the risks and costs associated with insuring EVs. John Lewis confirmed that the review 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 and Covéa provides policy administration, underwriting, pricing, and claims services. The decision to halt insurance coverage for EVs comes at a time when insuring these vehicles is more expensive compared to petrol or diesel cars. According to data from Confused.com, the cost of insuring EVs has risen by 72%, while the increase for internal combustion engine (ICE) vehicles is 29%. This is partly due to insurers lacking experience in pricing premiums for EVs, as the industry is still relatively new.

An expert in motor insurance, Louise Thomas, explained that one of the reasons for the higher premiums is the unfamiliarity of driving an EV. The instant acceleration and different braking system in EVs can take drivers some time to adjust to. Additionally, EVs are quieter than ICE vehicles, which raises concerns about potential accidents. The increased risk of accidents and subsequent claims for insurers leads to higher premiums for EV owners.

FutureCar Staff