EV Charging Cables: Policy Wording Could Be Better

Does the insurance industry have a problem with EV insurance? Maybe so, here’s some research on policy wordings on charging cables, which are an integral part of lease/ownership of course.

Motor insurance experts at Defaqto are calling for more clarity from providers, as new data highlights a number of ‘grey areas’ around EV cables, charging points and a lack of electric or hybrid courtesy cars.

Mike Powell, Motor Insurance Expert at Defaqto, said: “Over the last three years the number of car insurance products that do not provide any cover for electric car cables has started to reduce. There are, however, around four in every 10 products today that do not clearly define in the policy documentation or on a website that cover is provided. That doesn’t necessarily mean that cover is not provided, as there are no exclusions applicable. It means that for these products, a consumer would need to check with their insurance provider to confirm that cover is given.”

Defaqto also reviewed comprehensive car products to ascertain whether ADF&T cover is given for an electrical charging point at the policyholder’s address. There has been a notable improvement in the number of products including cover, with just over a third of all products including cover today, compared to a quarter in 2022.

However, there is a potential issue for the industry as some Home Buildings insurance products now include cover for electric car charging points and also for electric car cable liability.

Mike explains: “The issue here is that policyholders could potentially be at risk if providers apply a contribution clause, with each agreeing to pay 50% of the claim. This could see some policyholders paying two excesses as well as losing any no claims discount under both their car and home insurance.

“We have also noted that some wordings state that cover would be excluded if insurance cover is provided elsewhere, which could leave a policyholder having to deal with two providers to work out how their claim would in fact be paid.

For electric car cable liability, Defaqto looked at cover provided against the death or bodily injury to any person or damage to property when the electric car cable is in use and is charging the car. The data shows that there has been a slight increase in the number of car insurance products that will exclude liability cover.

Mike continues: “The grey area with home buildings and contents insurance exists here too. For liability claims, if the car is being charged at the policyholder’s home address and they own their own home, and the car is situated within the ‘boundaries’ of the home, liability cover could also be provided under ‘Property Owners Liability’ within a building’s insurance product.

“As the cables are connected to the electric charging point (which is attached to the home) this is therefore part of the buildings. Therefore, if someone for example, was to trip and fall over the cable and was injured cover could be applicable under both the car and home buildings insurance.

“For someone who does not own their own home and rents, cover could also be applicable under their ‘contents’ insurance under the ‘Personal Liability’ section of cover.”

Defaqto also reviewed car insurance products around the availability of an electric or hybrid courtesy car for policyholders when their own car is being repaired at an approved repairer. The data revealed that the majority of products do not offer these types of courtesy cars and where cover is available, 2% of products will only cover as an optional add-on benefit. Only 3% of products today include this benefit as a standard feature.

 Mike Powell said: “Although it’s positive to see the improvements that have been made in recent years, there is still some work to be done across the industry to make sure that insurance policies keep pace with the evolving automotive landscape. Especially when it comes to the grey areas that could cause confusion for policyholders.”

Defaqto maintains the UK’s most comprehensive financial product database, providing independent expertise, insights, tools and technology to help everyone make smarter financial decisions, and has put together the above based on data available from Defaqto Matrix on 28 June 2024.