The department store’s lending arm said it had halted offering new policies as well as renewals for EVs earlier this year
John Lewis Financial Services has issued an update after it temporarily stopped offering insurance to drivers of electric vehicles (EVs).
Earlier this year (2 October 2023), the department store’s lending arm said it had halted offering new policies as well as renewals for such cars following a decision made by its underwriter Covéa.
John Lewis said at the time that Covéa wanted to analyse the risks and costs entailed with EVs.
And in an update sent to Insurance Times, John Lewis said a review was still ongoing.
“Next steps are still under review by Covea, our underwriter, which manages these policies,” a spokesperson said.
Back in April 2021, Covéa entered into a five-year motor insurance partnership with the department store – the deal sees car insurance marketed by John Lewis, with policy administration, underwriting, pricing and claims service provided by Covéa.
The insurer’s decision over EVs came at a time when the cost of insuring one is currently higher than for petrol or diesel powered cars.
Last month (26 October 2023), Confused.com said its data showed that drivers of EVs had seen costs rise by 72%, while the increase for motorists with internal combustion engines (ICE) was 29%.
One of the reasons cited for this was that insurers do not have the experience of pricing premiums for EVs, as the industry is still in its infancy.
“That’s compounded by the fact that most people aren’t used to driving an EV,” Louise Thomas, motor insurance expert, said.
“Unlike ICEs, EVs have instant acceleration, which can take drivers a bit of getting used to. Similarly, braking can feel different in an EV.
“The brakes will activate as the driver lifts their foot off the accelerator, even before you hit the brake pedal.”
She also highlighted that EVs can be more dangerous due to being much quieter than ICE vehicles.
“There’s concern that the quietness of EVs could lead to more accidents,” Thomas said.
“And for insurers, that means more claims, which will inevitably mean higher premiums.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
Now working within the insurance sector, James has a particular focus on motor, M&A activity and financial reporting.View full Profile