Mercedes-Benz’s first battery powered electric vehicle (EV) will go on sale in South Africa in 2020. This will be the fourth EV to launch in South Africa. Although South Africa has a few hurdles to cross before we can fully adopt the future of driving, research and many media reports have revealed that the global motoring industry is planning to phase out combustion vehicle engines within the next two decades.
What is the impact of this on insurance though – now and in the future?
Insurance premium, claims and theft
A recent article indicated that drivers of EVs in South Africa and globally are currently paying higher insurance premiums for their electric vehicles. The reason appears to be that there is not enough data about them yet.
“In the absence of data, insurers globally have tended to default to higher premiums. South Africa has proved no exception in this regard,” Christelle Colman, insurance expert at Old Mutual Insure explains in an article published on the Hypertext website. “However, despite this lack of data right now, in future we may see EVs fetching a lower insurance premium than their fossil fuel powered counterparts”.
Another possible benefit is a reduction in accident claims. Absa Vehicle and Asset Finance managing executive Faisal Mkhize, points out in another article that the benefit of increased autonomous driving technology, such as adaptive cruise control, automatic emergency braking and lane keep assist, will further reduce the number of accident claims. It is not expected that autonomous vehicles will take away the role of a driver, but there is a belief that it will improve accident avoidance. Global insurance group Lloyds reports that 93% of all road traffic accidents worldwide are caused by human error, with 1.3-million fatalities every year.
The fact that EVs barely make a sound when they’re running might bear a type of insurance problem though. A report by the UK Guide Dogs charity found a 54% increase in pedestrian injuries involving ‘quiet’ cars between 2012 and 2013. The report stated that people crossing the street are 40% more likely to be hit by a silent hybrid or EV than by one with a petrol or diesel engine.
Motor vehicle theft statistics in South Africa are quite high. In the last year, over 83 000 incidents took place. Will the increase in EVs increase or decrease car theft? According to Colman it is a tricky question. “We are also not sure about how likely, or unlikely, EVs are to be stolen or whether they will present a different theft or malicious damage risk from other vehicles,” she explains.
|●||Japan now has more EV recharge points than filling stations. A recent survey by Nissan found fewer than 35 000 petrol stations across the country, compared to more than 40 000 places nationwide where EV owners can plug in and recharge their vehicles.|
|●||In May, Norway became the fourth country – after the United States, China and Japan – to hit 100 000 EV sales. The US now has about 450 000 EVs on the road, China is at about 300 000, and Japan at around 150 000.|
Global trends therefore show that there is a huge increase in electric mobility. In South Africa the question is not so much about embracing the trend, the question is more whether a market exists in a country where load-shedding is the talk of the town.
Click here to read the Engineering News article.
Click here to read the Hypertext article.