James Roberts, head of insurance sales at Europcar, discusses the rise in expectation around replacement vehicles
There are over 1.3 million electric vehicles (EVs) on the UK roads according to tracking firm ZapMap – and this number is only going to get higher.
The figures clearly demonstrate the increasing popularity of the vehicles amongst consumers, yet the insurance industry is still holding back on full EV adoption as our Europcar Sustainable Evolution Sustainability 2025 report identified.
This could be because the average cost of repairing a used EV is more than a quarter higher than the price of fixing issues with internal combustion engine (ICE) vehicles. It is, therefore, understandable that some insurers are hesitating on underwriting EVs on a wholesale basis.
Replacement vehicle supply is one of the biggest challenges the market needs to overcome. As the insurance industry tries to align customer expectation with supply as EV adoption grows, the risk is that the body shop sector gets caught in the middle – especially because, for many body shop operations, owning a fleet of electric vehicles alongside ICE models is a commitment they simply can’t afford.
Nevertheless, the insurance industry must act now to avoid falling short on EV customer expectations.
Living up to expectations
Recent Europcar research found that 89% of EV drivers expect their insurer to provide a like-for-like electric vehicle replacement.
However, of those who had required a replacement while their electric vehicle was being repaired, only 65% received an EV. The mismatch between expectation and reality means EV drivers are likely to be less satisfied with their claims experience as a result.
A poor claims experience is acknowledged as a key trigger for a lost customer, whereas a good experience enhances brand loyalty and customer retention.
It can also be a key point of scrutiny for the regulators. Replacement vehicle provision is a fundamental component of a motor insurance claim and insurers need to ensure their providers are doing everything possible to remove friction and dissatisfaction from the experience.
And this is critical in the EV space – electric vehicle owners are most likely to have made a conscious decision over their vehicle of choice and will be less appreciative of having to compromise when it comes to going from an EV into an ICE replacement.
Sorting supply
A shift in the industry needs to occur to ensure that the supply chain has access to electric vehicles – cars and vans – as they need them.
Insurers should consider putting agreements in place with replacement vehicle providers that have a good selection of EVs that could be accessed by body shops on an individual basis.
Looking outside the usual sources of vehicles and partnering with a rental company with a strong national network and comprehensive EV fleet could help ease future supply pressures and targets.
And this would help the industry to reach the stage where an EV driver receives an EV replacement vehicle, irrespective of fault or non-fault claim.
- To find out more about Europcar’s EV proposition, click here
