Electric vehicles (EVs) are growing steadily more popular in South Africa, as charging infrastructure and battery technology improves, and more brands enter the market. Although we’re now seeing more of them on our roads, EVs are still more expensive than cars with internal combustion engines (ICE), partly due to import duties and component costs.

However, there is evidence that a maturing market and more people trying to avoid the negative environmental impact of ICE vehicles will continue to increase EV demand. If you’re considering buying an EV, you’ll want to insure it. Are there special insurance needs for the specialised components of the car?

Comparing ICE and EV vehicle cover 

Some insurers internationally – in the UK, for example – make specific provisions for EV components in their vehicle insurance policies, but this is usually because EV uptake in that country is more advanced, with vehicles and charging infrastructure more widely available. EV-specific insurance is not available in South Africa yet.

In principle, however, all insurers will insure your EV for the same risks as a standard petrol or diesel car. This applies in South Africa too – you’ll need cover for accidents, fire, theft and other common risks. However, an EV will also have some unique aspects to consider.

For instance, EVs rely on specialised parts like batteries and charging systems that can be expensive to replace or repair. Your policy will need to cover these individual components, which could add to the cost of insurance.

On the other hand, your insurer will also consider that EVs are likely to require less maintenance, and that they have improved safety features, like advanced braking systems and collision-avoidance technology. The overall cost of ownership could be lower than that of a comparable ICE vehicle. The positives and negatives will all factor into the cost of your EV insurance.

Just as it would for insurance on an ICE car, your policy premium will reflect the risk profile for your EV. The profile considers the type of vehicle and its insured value, the availability and cost of parts, and your personal circumstances, like where you live, your age, and your driving history. But the bottom line is that your insurance premiums will be more expensive if you buy a more expensive car – and because EVs are currently more expensive than other cars, they are also more expensive to insure.

Understanding EV components and insurance

Insurance companies consider some specific technological innovations in EVs when assessing the cost of cover, like the following:

• Battery cover
  
  The rechargeable lithium-ion (Li+) battery pack is a critical component of an EV, and they cost thousands to replace – which affects the cost of insurance. Your EV insurance policy should cover battery damage by accident, theft or other perils.

• Maintenance cover
  
  Generally, EVs require less maintenance over their lifespan than ICE cars. They have fewer moving parts, and need no oil changes, spark plug replacements, or other traditional ICE maintenance. EV maintenance includes software updates to ensure optimal performance, but these are usually covered in your service contract. This is like an extended warranty, providing certain repairs or maintenance beyond the warranty period. It usually includes roadside assistance, giving you the same peace of mind as you’d have with an ICE car.

• Home charging station cover
  
  Home charging is a popular and convenient option for many EV models. But if your home charging setup is incorrectly installed, it could cause damage and have a negative impact on your insurance costs. It’s important to have your charging station professionally installed and connected to your property’s grid. Also make sure that your home charging station is covered by your home insurance policy. ‍

• Public charging station cover
  
  Public charging stations may pose certain risks, so if you own one of these facilities, consult a professional insurance adviser about the type of commercial or business cover you need. Stations are often located in public areas, where they are at risk of accidents, vandalism, or other damage that could harm an EV while it’s charging. If the charging station isn’t maintained correctly or has a fault in the wiring, you run the risk of electrical shock or fire. Liability cover can protect you against damage to third-party property or injury to others from public charging stations. Insurers may look at factors like the location of the station, the type of charging equipment used, the volume of charging activity and the history of claims or incidents at that specific station. 

Some more EV cost implications

Apart from lower maintenance costs, EVs also save you the cost of carbon taxes on fuel. However, breakdowns can be much more inconvenient and costly. If you run out of fuel in an ICE vehicle, you can get a lift to a petrol station with a jerrycan. If you have a flat battery or mechanical failure in an EV, you’ll need to have the vehicle loaded onto a flatbed truck and taken to a dealership for repairs.

There are currently almost 400 public charging stations spread around SA, mainly along major routes. Until we have a more extensive network, checking your EV’s range and planning trips around charging stations will be essential to avoid expensive breakdowns.  

If you’re buying an EV, you need to be aware of the insurance risks. Check your vehicle insurance policy and consult your insurance provider to understand your options.

Learn more about Nedbank Vehicle Insurance.