Consumers in the U.S. are rapidly adapting to electric vehicles, a shift away from the internal combustion engine that may change auto insurance claim characteristics.
CCC Intelligent Solutions said in new report that electric vehicles made up 4.6 percent of new light-vehicle registrations in the first quarter of 2022, up from 2.6 percent of registrations in 2021 and 1.5 percent in 2020.
Nearly 450,000 electric vehicles were sold in 2021, an 83 percent increase from the prior year.
During an interview, CCC Analyst Susanna Gotsch said the numbers show that consumers now view electric vehicles as a legitimate alternative to gasoline-powered cars. Gotsch is senior director of insight and analytics for CCC, a Chicago-based technology company.
Her report says that electric vehicle technology has several characteristics that could increase claim severity, but also contravening traits that may improve safety.
Electric vehicles are heavier than conventional vehicles because of the weight of the batteries, which are typically laid across the bottom like a skateboard. A battery-powered Volkswagen ID.4, for example, weighs more than 25 percent more than its gas-powered counterpart, the Tiguan. The Hyundai Kona electric is about 18% heavier than the gas-powered Kona.
Gotsch said studies have shown that heavier vehicles cause more damage and injuries.
“If you look at pure physics, the larger, heavier car in an accident wins,” she said.
On the other hand, electric vehicles generally come to a stop faster, according to CCC.
The Polestar 2, for instance, had an average stopping distance of 139 feet from 60 mph on a wet road, compared to 127 feet for its gasoline-powered counterpart, the Volvo S60. The electric Kia Niro had an average stopping distance of 136 feet, compared to 152 feet for the standard Niro.
The report noted some exceptions. The electric Jaguar I-Pace, VW Tiguan, Hyundai Kona and Ford Mustang Mach-E all had longer stopping distances than their gasoline-powered counterparts.
Technology gives electric vehicles another leg up on safety. The report says that many manufacturers have already met a voluntarily commitment to equip their electric vehicles with front emergency braking.
Gotsch said the vehicles are also likely have Internet connectivity and telematics features, which may encourage owners to enroll in usage-based auto insurance programs. She said insurance products that encourage drivers to avoid bad habits such as speeding and abrupt braking have been shown to reduce claims.
It will take many years before electric vehicles make up a large share of the cars on U.S. roads. Gotsch said automobiles of today last longer and consumers are holding on to them longer. That is especially true in this period of high inflation. She said the after-market auto parts industry has reported healthy revenue growth, a sign that car owners are choosing to repair their vehicles rather than replace them.
The limited sample of claims that are available for analysis does, however, show some differences between electric and gasoline-powered cars. The average vehicle repair cost of $4,041 for non-luxury small electric cars was 26.6 percent greater than for conventional vehicles.
Electric vehicles also spent more time in the shop than their conventional counterparts: About 31 days vs. about 28 days for gasoline-powered, according to the CCC report. Electric cars more often require operations such as scan and calibration because they are more often equipped with advanced driver assistance systems.
In summary, as more electric vehicles are sold in the U.S., the insurance and collision repair industries will see more within the claim and repair mix. Understanding some of the key differences will be increasingly important from an underwriting perspective for insurers as more customers acquire these vehicles.
The CCC report says insurers will see more electric vehicle claims as they grow in popularity, making it more important for underwriters to understand differences in claims patterns. Repair shops also need to decide whether to invest in training and equipment that will allow them to make repairs.
“As vehicle technology continues to evolve and become ever more complex, EV’s are essentially the poster child for the future demands for our industry,” the report concludes.
(This article originally appeared in our sister publication Claims Journal. Reporter Jim Sams is the editor of Claims Journal)