The future is coming – but Australians might not be quite ready to give up the past. While some other countries have embraced the movement towards electric vehicles (EV), we’re still in second gear. As EVs become more globally mainstream, the costs are dropping rapidly and there can be some tangible benefits for drivers making the switch, such as reducing environmental impact and saving money on fuel and maintenance costs.
But, how do you know if the switch is right for you? And how will it affect your insurance premium? Keep scrolling for our crash course on electric vehicles.
EV sales slow in Australia
It’s no secret that Aussies have been pumping the brakes when it comes to electric vehicle uptake. While the rest of the world lead the way, we’re slugging behind in the stats. Sales of EVs in Europe rose from 3.3% of all new cars in 2019 to 10.2% last year, while in Australia they increased from 0.6% to 0.75%. What could be behind those figures? With limited efforts to decarbonise our country and very few national targets for the EV rollout, major manufacturers are choosing to avoid the Aussie market. Because of this, we have a limited choice of older models at relatively high prices compared to other countries.
Still, our speed is picking up. In the first half of 2021, 8,688 EVs were sold, already eclipsing the 6,900 electric vehicles sold over the whole of 2020. And not just for domestic vehicles – as we discussed in our autonomous vehicle blog, we’re starting to see things like electric tractors becoming available.
Electric vehicles and the environment
Electric vehicles may aid us along the path to helping our environment. With a regular vehicle, motor pollution is pumped straight onto our streets where we live and breathe. Vehicle air pollution has been estimated to be the cause of over 1,700 deaths per year in Australia. So, switching to the high road and choosing to use EVs could significantly contribute to the avoidance of early deaths.
The switch can also play an essential role in reducing the demand for more fossil fuel energy. Electric vehicles require no fossil fuel energy to run, meaning that the replacement of these energy sources (coal, gas, and oil) with renewable energy (solar, wind and hydro) is gaining momentum.
Benefits of electric vehicles for users
Although the upfront cost may be greater, long-term savings are a huge benefit of electric vehicles. They require less expensive and less frequent maintenance, with fewer moving parts that require replacing. Overall, the running costs of an EV are around 70% cheaper per km when compared to a conventional vehicle.
Another convincing benefit of having an EV is convenience. You can charge your car overnight while you sleep, so it’s ready to go when you are. Say goodbye to ill-timed service station stops on the commute to work, and hello to fuel refills that fit around you.
For users, a quieter, more enjoyable driving experience in EVs champions most other benefits. The quietness of the vehicle compared to gas automobiles increases comfort and creates a relaxed driving environment. Although some may miss the sound of an engine roaring!
How does having an electric vehicle impact my insurance?
Insuring an EV is now far more straightforward than in the past and there is little difference between buying cover for a plug-in car to a comparative diesel or petrol vehicle.
There are five basics when it comes to automotive insurance – whether it’s for an electric or standard vehicle – each with specific cover to minimise risk and expense:
- Compulsory third party (CTP) insurance: CTP is mandatory in all states and territories in Australia. It provides cover for bodily injuries caused by a vehicle, such as compensation for a broken leg, but doesn’t cover any damage to the actual vehicle. This compulsory insurance is paid with vehicle registration in most states.
- Comprehensive insurance: This can cover damage to vehicles, theft of vehicles, collisions, malicious damage, and weather damage. Contingent to the policy, it can cover damage that has been caused to other vehicles.
- Fire and theft only: This insurance type is a limited form that only covers fire damage to, and theft of, vehicles. It does not cover collision damage to vehicles in the event of a crash.
- Third party property only: Provides cover for vehicles that are damaged by your vehicle, allowing you to financially protect yourself against damage to other motorists.
- Nominated driver or low kilometre usage: Restricted comprehensive cover with only two allowable drivers without increased excess, or low kilometre travel over the period of insurance, i.e., up to 10,000km.
How we can help
Whether you already own an electric vehicle or are looking to make the switch, Western General Insurance can provide you with impartial advice and custom-built insurance cover. Contact us today to find out more.