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EVs Pose New Challenges To Insurance Companies

electruck

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Hmp10

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This article fails to address one of the largest components of insurance pricing: the risk of theft. Since an electric vehicle cannot be charged at a roadway charger without the vehicle's presence being registered there, EVs are not attractive targets for car thieves.

I have three cars insured with State Farm. Despite my Tesla Model S P90D being the highest-performance and most expensive of the three, its insurance rate is the lowest and has been throughout the depreciation period.

I'm not quite sure how Sandy Munro arrived at the figure of a battery pack being half the cost of an EV. That might be the case for the very few inexpensive EVs out there, but the majority of EV's cost well more than double the price of a replacement battery pack. For instance, I paid $128,000 for my Tesla in 2015. A replacement battery pack would cost about $12,000.
 

thrill

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The article does us a disservice by not referring to the report itself. Google was of little help, but visiting the report producer's webpage and looking around leads you to an email collection form that lets you view the report in full: https://www.agcs.allianz.com/conten...eports/AGCS-Electric-Vehicles-Risk-Report.pdf

I read through the report, which states it is focused on liability for component replacement, and there's not a lot of meat there, The cost of the battery being the most significant portion of the vehicle's expense, as @Hmp10 points out above, is probably only a rough estimate for a specific vehicle at a specific time, and is also perhaps best viewed as a percentage of total component cost, and not total vehicle cost including assembly, marketing, etc.

The report acknowledges there's a tremendous amount of unknowns, but like the parent article does, and other articles will inevitably do, the implication that gets *assumed* and *reported* is that they will cost *more*, or articles might even use the word "may", but probably with little effort made to quantify the amount of risk in "may".

I think the approach insurance companies need to consider is not that common in commercial circles, as far as I know, but is common in certain insurance groups such as USAA. They evaluate at the end of each year and return any unused automobile insurance collections to their members, less a designated amount held in reserve. A commercial approach to this considers any non-losses as extra-profit. That's rather short term thinking, and leads to vehicle manufacturers being competitive in offering their own insurance.
 
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EyeOnRivian

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This article fails to address one of the largest components of insurance pricing: the risk of theft. Since an electric vehicle cannot be charged at a roadway charger without the vehicle's presence being registered there, EVs are not attractive targets for car thieves.
Most vehicles are stolen for their parts rather than to be driven. As such, older vehicles are stolen more than newer ones simply because there are more of the older vehicles on the road that need parts. So statistically speaking, newer vehicles and vehicles with lower share of vehicles on the road (which most EVs will fall into) are less likely to be stolen.
 

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jjwolf120

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It will take a new kind of car thief. The vulnerability of electric cars is software. Hacking will be the required skill.
 

EyeOnRivian

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It will take a new kind of car thief. The vulnerability of electric cars is software. Hacking will be the required skill.
That's very true. However, they typically do their hacking from the safety of their home or a wifi hotspot. It's another for them to go to the actually scene of the crime and have the audacity to actually steal the vehicle in person. Perhaps auto thieves will team up with hackers where a hacker will remotely allow the auto thief to gain access to the vehicle. Hmm, that brings up an interesting point of FSD vehicles when they become more mainstream. The hacker may be able to pull this off themselves by instructing the vehicle to drive to a remote location to be stripped or picked up later to be driven to another location.

To be honest, auto theft is the least of my concerns with the increase software controlled hardware in vehicles these days. I've seen unsettling videos of hackers taking control of a vehicle while it was currently being operated.
 

EyeOnRivian

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