I was quoted £9,000 a year to insure my Tesla Model X

Philip Small has never paid more than £1,000 a year to insure his electric car, so this month he was shocked to be quoted £8,932.

The 55-year-old has never been in an accident and hasn’t changed the terms of his policy on his Tesla Model X, which he bought in 2019. So he couldn’t understand why he was being quoted up to nine times more than last year.

“I don’t see how these increases are justified,” says Philip, who owns and runs London catering and events firm Philip Small Ltd and travels about 12,000 miles a year.

All drivers saw an increase in the cost of their car insurance. But electric car owners have been hit the hardest, with many seeing incredible increases.

Premiums for petrol and diesel cars have increased by 29 per cent, rising by an average of £192 to £848, according to price comparison website Confused. However, insurance premiums for electric vehicle deals have jumped by an average of £402 to £959 – a 72 per cent increase.

Difficulties in sourcing parts for electric cars and a shortage of workshops and technicians capable of repairing these vehicles have pushed up premiums, according to Andy Moody, founder of the temporary car insurance website GoShorty.

Premiums tend to be higher because electric vehicles tend to be more expensive to repair, costing a quarter more on average than petrol or diesel vehicles, according to Thatcham Research, a motoring research group.

Moody says: “The bottom line is that not all service centers can handle these vehicles. They often have to be repaired using a specialist kit and away from traditional vehicles due to the fire risk that vehicle batteries pose.

“The supply of spare parts can be limited and expensive compared to traditional cars due to the smaller size of the market – which can increase repair times and associated costs.”

But Philip Small says that doesn’t justify the sudden, dramatic increase in his insurance quotes.

The Tesla owner’s insurance bill was £700 a year when he bought the car in 2019, rising to £1,000 last year.

But when Philip went to renew his annual policy with his insurer LV this month, he was told his annual premiums would rise to more than £2,000.

Philip shopped around on comparison websites but couldn’t find a better deal. One deal offered by Tesco was an impressive £8,932 a year.

He says: “With an electric car, you have a battery and some electrical components.

“Very few things can go wrong, unlike petrol or diesel cars where you have an engine and an exhaust system. It’s still under warranty.

“Tesla gives you a four-year warranty, so if something goes wrong, they’ll take care of it and you won’t have to file a claim.”

When Philip asked LV why it had doubled the price of his policy this year, he was told that parts for Teslas are hard to come by and that only Tesla-approved workshops can do repairs. There are only six approved workshops in London.

But insurance costs for electric vehicles are rising across the board. His wife’s electric Mini came up for renewal at the same time and her insurance bill rose from £450 to £732 – a 63 per cent increase.

Philip believes that the benefits of owning an electric car are diminishing.

“Tax breaks are being withdrawn and the congestion charge on electric cars is coming in from 2025,” he says. “Rising electricity prices means it’s also more expensive to charge them.”

GoShorty’s Moody says rapid technological advances mean older cars are now worth significantly less than their original value. This can lead to more write-offs in the event of a claim, increasing potential losses for insurers.

Darryl Bowman of Cuvva, another auto insurance website that specializes in temporary coverage, says the battery can account for 20 to 40 percent of the car’s total value.

Damaged batteries cannot always be replaced, resulting in the entire car being written off.

Insurers withdraw EV cover

John Lewis has stopped offering electric car insurance as the cost of repairs soared.

The store’s finance business, John Lewis Financial Services, has temporarily suspended sales of battery-powered vehicle cover to both new customers and those renewing existing policies.

A spokesman said the group’s insurer, Covea, had imposed the sales ban while it analyzed the risks and costs.

Moody’s warned that any further bans could spur price increases as other insurers react to reduced competition in the sector.

“With so many insurers moving away from certain sectors, the rest are now insuring more of the high risk and cost of these vehicles.

“This will cause premiums to rise again significantly over the next 12 months, which could lead to more people selling their electric car – reducing value further.”

Rising insurance costs and the high cost of electric cars mean they are still out of reach for many households.

However, insurance costs will decrease when the used car inventory eventually increases, says Cuvva’s Bowman.

He adds: “Because electric vehicles are relatively new and fewer of them are on the road, replacing parts can be more of a challenge, unlike traditional cars where parts are readily available.”

Steve Smith, 65, has been driving electric cars for the past eight years. When he bought his first Tesla, a Model S, in 2015, he paid £500 a year for insurance.

Last year at renewal he was quoted £422 for his Tesla Model 3 Performance, which he bought in 2019.

However, this year Steve’s insurer quoted him £1,531 – despite no change in his circumstances. He was able to secure a policy for £962 with another provider, but the shock surge forced him to sell his Tesla.

Instead, he bought a Toyota bZ4X – also an electric car. His premiums have now fallen to around £760 a year. Now retired, Steve was a police officer for 30 years and had advanced driving skills. Later he was an insurance fraud investigator investigating “crash money.” He says: “The insurance industry is paying little attention to the development of electric cars. It’s easy to get repairs, but insurers think it will be difficult and expensive.

“I filed a claim a few years ago when I was hit by an uninsured driver, but all repairs were resolved within seven days.”

Thomas Winston, a firefighter from South Wales, was told the insurance bill for his Tesla Model 3 Long Range would jump from £650 to £1,100 a year when his policy came up for renewal in September.

Thomas, 44, looked at comparison websites but was given offers of £2,000 to £3,000 – much higher than if he stayed with his existing insurer Privilege.

Thomas called Admiral, the company that provides his home insurance, and managed to arrange £600 worth of cover for his car.

He says: “Premiums always have to go up because of inflation. But each insurer seems to increase them by different amounts, so you feel like you don’t really know what they’re actually selling you.