Ever wondered how car insurance works for electric vehicles in NZ? For starters, EV coverage tends to be higher as these vehicles cost more than regular cars, and their materials are more expensive to repair or replace.
New EV owners should expect a big change in their behaviour and habits when it comes to their cars. These may include things like charging every evening so they’ll have enough juice to last the next day, or navigating charging stations along NZ roads.
Another aspect that might be overlooked is the way car insurance changes when you shift to EVs. Here's our EV insurance and assistance guide in NZ.
Tower Insurance's chief underwriting officer Ron Mudaliar noted that in the past six months, policies sold specifically for electric vehicles in NZ rose by 40%. EV owners, he said, are now beginning to represent a significant chunk of their customer base.
“The rise of EVs has been on our radar from around the start of this year when we started to see stronger sales, and our portfolio has been growing along with that,” says Mudaliar. “In 2020, we saw sales of EVs go up by around 40% in New Zealand, and that trend matches the increase in our portfolio from February to our latest numbers.”
For now, Tower says that their policy wording remains the same as with traditional vehicle types.
“Tower’s EV policies follow the same policy wording that we offer for petrol and diesel-powered vehicles. We base the pricing on several variables such as the vehicle model, the vehicle’s value, where the vehicle is parked, cost of repair and what we know about the driver and their claims history,” says Mudaliar.
“Tower offers insurance for a wide range of EVs including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs). We’re working quickly to gather local data on the cost of repairs as new car models and technologies are introduced to the market, to ensure we offer the right insurance product at the right price for our customers.”
Do note that Tower also confirmed that while it generally excludes battery failures in the policy (though that should be covered under the manufacturer’s warranty), Tower can send for an OEM replacement to be installed by an authorised agent, in case it gets damaged or compromised in an accident.
Popular models that Tower insures include:
AMI offers their car insurance policies to electric vehicles in NZ, including hybrid and plug-in hybrid models such as:
These cars are also covered under AMI comprehensive car insurance, giving EV owners the same benefits and protection from accidental loss, damage, fire, theft, liability, and other extras offered that you may wish to add to your plan. This means EVs are also covered under their AMI Breakdown Service.
Likewise, the plan also covers the charger or charging cable that comes with your vehicle as it is considered a part of it. You can use the policy to help get a replacement should it be lost or compromised.
Note that any electric vehicle charging station at home isn’t counted as part of the policy. However, you can get it covered under AMI House Insurance if it was permanently wired in by a technician.
AMI Insurance has also confirmed that it will replace the battery should it be damaged as a result of an accident, fire, water immersion, natural disasters, malicious damage, or even theft.
Despite the electric vehicle subsidy in NZ making it a purchase cheaper, AMI suggests insuring your vehicle for the original price. That way, this will be the amount repaid in the event of a successful total loss claim for the vehicle.
AA says that it’s adding a special Electric Vehicle Package to its Mechanical Breakdown policy. This will help cover drive units, auxiliary engines, dual chargers, and even the battery in which AA will provide one replacement for up to $10,000 of the cost for vehicles that are 10 years old or less.
On the other hand, AA will pay for up to 50% of the claim minus excess if it is older than 10 years.
Unlike most insurance policies, roadside assistance such as towing can be quite different for electric vehicles in NZ. For one, it’s not recommended to tow an EV by lifting the driven wheels since it could damage the motor, despite the fact that most EVs have a neutral gear setting.
Most roadside assistance programs can cover EVs but in the event towing services are needed, it is recommended that owners request using a flatbed vehicle transporter to help out without damaging the motor.
In this instance, AA offers a special Rapid Recovery Vehicle in Auckland, which allows them to deploy their trailer and lift all four wheels of a broken-down EV up to 2.5 tonnes in just 10-15 minutes, so policyholders no longer need to wait for towing services should their vehicle be immobilized on the road.
The service also runs a mobile EV charger service in Wellington for drivers who find themselves running out of juice before they can come home.
Tower’s Mudaliar notes that while EVs used to be quite expensive, the increasing adoption means parts have become more available, while repairs have become more affordable. Gathering data on even more vehicle models and their repairability will be a key focus for Tower over the next several years as it further refines its EV-related offerings and benefits.
The company is looking to introduce even more in order to increase ownership levels.
“What we are trying to do is allow the transition so that we can offer benefits - for example, under roadside assist, we’ve added the ability for that EV to be taken to the nearest charge point,” Mudaliar explains. “We’re slowly adding more EV-specific benefits into our product to allow for that change, and we’re going to keep looking at other additional features.”
“When we deal with total losses, we’re also thinking about how we can influence the customer to move from an older vehicle to an EV. I think that’ll be an important piece for us going forward. When it comes to climate change, you need to start in your own backyard, and us facilitating the use of clean vehicles and making them easier to purchase is a key way to reduce CO2 emissions.
“Then as our portfolio changes, we’ll see what we can do from a product perspective that’s more weighted towards an EV. It’ll take some time, but we’re definitely in the transition period, and so we have to start thinking about how we can support that.”
In the meantime, customers are encouraged to look closely at their car insurance plans, ensuring that all the EV-related benefits are included.
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