Blog: A new era for electric vehicles

As EV ownership grows, fewer customers will be willing to compromise on their choice of replacement vehicle, says Europcar’s James Roberts

Electric vehicles (EVs) and zero-emission driving are already proving contentious issues as we move into the second quarter of 2025. As the industry awaits the outcome of the Government’s EV consultation, the question remains as to what happens next and whether UK insurers will be able to keep pace.

Expectation versus reality

Probably the biggest issue facing the market is the use of EVs as replacement vehicles by the body shop sector and the lack of supply. Europcar research reveals that 89% of electric vehicle owners expect their insurer to provide a like-for-like EV replacement if their vehicle is off the road. Of those EV drivers who had required a replacement vehicle following an accident, only 65% had received one.

To date, insurers unable to offer electric replacements have found consumers are usually content with an internal combustion engine (ICE) replacement vehicle while their EV is repaired, as long as the repair is quick, and their premium remains low. 

However, as EV ownership grows, customers will be less willing to compromise when it comes to getting a ‘like-for-like’ EV. They made a conscious decision over their vehicle choice and won’t welcome being put into an ICE vehicle. 

For salary sacrifice or fleet customers, there is also a ‘benefit in kind’ (BIK) consideration and personal tax liability for driving an ICE vehicle which will make the conversation more complex.

As it currently stands, for ‘non fault’ claims, the policyholder would generally receive a like-for-like EV, but the issue gets a bit more complex when it comes to ‘fault’ claims. 

In practice, what tends to happen is the policyholder is provided with whatever vehicle the body shop has available as the insurer tries to control claims costs. This puts the onus on the body shop to manage the customer’s expectation and, potentially, dissatisfaction.

The goal should be for EV drivers to receive an EV replacement vehicle, irrespective of fault or non-fault claim.

James Roberts, Europcar

Part of the problem is that the burden to provide a courtesy car sits with the body shop and the contribution by the insurer doesn’t always cover the full cost of mobility. The mismatch between expectation and reality means EV drivers – who have made a conscious choice to go electric – are likely to be less satisfied with their claims experience as a result.

Claim satisfaction

The claims experience is one of the critical points in the policyholder/insurer relationship, and a key point of scrutiny for the regulators. A poor claims experience is acknowledged as a key trigger for a lost customer, while a good claims experience enhances brand loyalty and customer retention.

Replacement vehicle provision is a fundamental component of a motor insurance claim. Insurers, therefore, rightly expect their providers to do everything possible to remove friction and dissatisfaction from the experience.

A spotlight is needed on continuity of service and how the insurance industry will combat EV availability issues. The goal should be for EV drivers to receive an EV replacement vehicle, irrespective of fault or non-fault claim.

Supply in a maturing market

For this to happen, the focus needs to shift to ensuring the supply chain has access to electric vehicles – cars and vans – as they need them. Clearly for many body shop operations owning a fleet of electric vehicles alongside ICE models is a big commitment. 

However, insurers could put in place agreements with replacement vehicle providers that have a good selection of electric vehicles that could be accessed by body shops on an individual basis.

The sector would do well to look outside the usual sources of vehicles – partnering with a rental company with a strong national network and comprehensive fleet of EVs could help ease future supply pressures and targets. 

Plus, excellent customer care and evolving service must remain front of mind, with greater investment made by the aftermarket sector into the training of dedicated technicians and handlers for the growing parc of EVs.

James Roberts is the head of insurance sales at Europcar

Sponsored