Alex Gosney and his wife, Rachel, expected an increase when they asked for a car insurance renewal quote for their two Teslas, as Alex had received three points for speeding.
But even so the quote they received shocked them: their bill would increase from £1,800 to £5,600 a year. Put another way, the bill just for their car insurance alone is now £450 a month.
“This is an increase of £3,800 – an amount we just did not expect,” said Alex, 34, who owns one Tesla outright and with his wife pays off the other one each month as part of a purchase plan.
“If one of the cars wasn’t leased, we would have given it up, but we do have two young children we need to take to school and we both work full time, so having two cars is convenient,” he added.
The Gosneys say that they will consider other makes of car in future if insurance costs for Teslas remain high.
The initial quote came from their existing insurer, Admiral. They turned to comparison sites to see if there were any better offers, and then a broker – but all to no avail. And so they stuck with the first offer.
“In fact, Admiral seemed to have the best deal. One of the quotes that came back was for £8,000,” Alex said. “We are fortunate that we have two incomes and so can just about afford it but other families will not be so lucky.
“For our next car, we will have to do more research to see which vehicles are cheaper to insure. If a hybrid is cheaper we will opt for that but for sustainability purposes, we’re going backwards to go forwards.”
Why have insurance costs for electric vehicles gone up so much?
One of the main reasons why policies can be so extortionate is because Teslas are electric vehicles, which are more expensive to insure because their repair costs are higher.
Figures from the price comparison site Compare the Market show that the cost of car insurance is rising faster for electric vehicles than petrol-fuelled cars. The typical EV premium has risen by £274 year-on-year, while insurance for a petrol-fuelled car has increased by £250.
Julie Daniels, a motor insurance expert at Compare the Market, said: “This increase may in part be due to insurers facing higher repair costs. The rapid rise in inflation will have probably affected many areas of the motor repair industry including the cost of spare parts, energy and hiring specialist mechanics.
“Insurance for EVs usually costs more as these cars are typically more expensive to purchase than petrol-fuelled equivalents. This means these vehicles are often also more costly to repair or replace. Replacing some parts of electric vehicles such as new batteries can be particularly costly.”
Batteries drive up the cost of electric car insurance so much as all use lithium ion batteries which are complex and expensive to repair or replace.
Data from the insurer Axa also recently revealed that when electric cars crash, they are more expensive to fix and can do more damage than other vehicles.
Louise Thomas, a motoring expert at Confused.com, said: “EVs typically use smarter technology or have more expensive parts than others so if an EV driver ever needed to make a claim, this would more likely cost their insurer a lot more to repair or replace compared to other vehicles. This includes smaller claims, too.”
While shopping around for a quote can help to curb some of the costs, car insurance prices are going up across the board.
The average bill is now £511, and the industry blames inflation and increased repair costs for the steep increases, which are expected to continue.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.