It’s no surprise that the future is shifting towards electric vehicles. States like California, New York, and Virginia have already passed laws that will ban the sale of gas-powered vehicles in the next fifteen years.
While challenges to transition to electric vehicles still persist, the benefits such as fighting against global climate change are massive. Many people are left wondering how this shift will affect the auto insurance industry. In this blog, we will discuss the future of auto insurance as the world shifts to EVs.
Potential Risks of Electric Vehicles
Although gas and electric-powered vehicles share many similarities, there are some unique concerns regarding EVs.
One general concern that’s already making headlines are battery fires. While both types of vehicles can be subject to battery fires, the make-up of electric motors differs from combustion engines making it harder to put out battery fires.
Despite these concerns, EV batteries have a 0.3 percent chance of igniting compared to a 1.5 percent chance for their gas-powered counterparts to catch fire. Still, battery fires in EVs can be more dangerous and harder to put out.
Another concern people have with the future of EVs is cyber risks. Since EVs are connected to technologies like wi-fi, data sharing, and semi-autonomous systems, the fear is these systems can be hacked into.
Luckily, incidents of hacking are extremely rare, but it’s still something to keep in mind when considering any auto insurance plans in the future.
Companies Are Already Transitioning
The future of electric vehicles is already underway. Companies like Amazon have already invested over $1 billion into these new technologies and are using electric sprinter vans to deliver packages.
Other companies like FedEx are also in pursuit of becoming completely carbon neutral within the next few decades. Whether you are a business owner who operates a fleet of commercial vehicles or just a regular everyday driver, the transition to EVs is inevitable. Planning how you will handle auto insurance to protect your vehicles now will better prepare you for the green future we are approaching.
Auto Insurance for Electric Vehicles
As of today, insurance for EVs typically costs more than insuring a gas-powered vehicle. This is due to the higher price of EVs and unknown potential risks that come with owning one. However, as EVs become more available to the public, the price of insurance could trickle down.
Policies for EVs feature the same coverage options as gas vehicles. This includes liability, bodily injury, collision, property damage, and garage keepers. While you can expect reduced fuel expenses and possible tax incentives from driving an EV, you may have a difficult time finding discounts for electric insurance for the time being.
Fortunately, when you take time to shop around and work with experts in the industry, you can receive the full coverage you need with favorable rates. At KF&B Insurance, our team is ready to help you with all your transportation insurance needs.
Prepare for a Bright Future With KF&B
As the world begins to shift towards the widespread adoption of EVs, you need an insurance partner who is also ready to shift their ways. Our team at KF&B Insurance understands the niche complexities that come with auto insurance. No matter what the future holds, we will be able to adapt and adequately protect our clients with the proper auto policies. For more information on our services, please contact us today to set up a call.