Do electric cars cost too much to insure?

Electric vehicles are cheaper to run than petrol cars. They are also more expensive to insure. Understanding why the second is true - and whether it matters as much as it sounds - is where any useful conversation about EV cover has to start. The EV insurance picture is getting more complicated as repair costs climb and the technology evolves, and the pace of adoption means the industry cannot wait for the market to self-correct. 

The average EV insurance premium in 2026 sits at around £654 per year, according to Brumble's analysis of ABI and Department for Transport data. The equivalent figure for petrol and diesel is £551 to £607. The gap currently sits at roughly 10 to 27% depending on vehicle mix and methodology. Two years ago it was larger: the premium gap stood at approximately 30% above petrol in 2023 and has narrowed continuously since. For some smaller, more affordable EVs - the Nissan Leaf, the MG4, the Dacia Spring - the gap has closed entirely and premiums are now comparable to petrol equivalents of similar size. 

Why EVs cost more to insure 

The battery problem. The high-voltage battery typically accounts for 30 to 50% of an EV's total value. Thatcham Research, whose data underpins the ABI's insurance group ratings, confirms that EV repairs are approximately 25% more expensive than petrol equivalents and take 14% longer. The battery replacement cost ranges from £14,200 at the low end to approximately £29,500 for high-end vehicles, according to Thatcham's own analysis. The average cost of a new battery across all EV models was £7,235 in 2024, excluding labour, according to SMMT data reported by MoneySuperMarket. 

The deeper problem is what Thatcham calls the depreciation curve. The cost of replacing an EV battery exceeds the used market value of the vehicle after just one year of ownership. A three-year-old EV involved in a minor side impact that damages the battery casing may be written off not because the damage is severe but because the economics of repair do not work - the battery costs more than the car is worth. UK businesses currently face more than £461 million annually in EV write-off costs, according to FWD Consulting research, with approximately one in five EVs being written off after relatively minor impacts because insurers lack access to battery-safe diagnostics and repair capacity. 

The quarantine problem. A damaged EV battery requires 48-hour isolation under specific safety protocols before repair work can begin. Thatcham's analysis puts the consequence in stark terms: a storage space with capacity for 100 ICE vehicles would allow the safe quarantine of just two battery EVs - a 98% reduction in effective repair capacity. The quarantine requirement alone adds a minimum of £60 to every claim, before any repair work starts, with further costs for transportation to alternative storage locations. Most coverage of EV insurance ignores this entirely. 

The technician problem. Only around 20% of UK technicians are currently qualified to work on high-voltage EV systems. The Institute of the Motor Industry reported 23,000 vacancies in the automotive aftermarket in early 2024. A recent Thatcham survey, conducted with the Centre for Economics and Business Research, found that battery-related issues remain the primary concern for 44.6% of insurers and 41.7% of repair professionals. Fewer qualified technicians means longer repair cycles, higher labour rates and more write-off decisions made on economic rather than technical grounds. 

The vehicle value problem. A Volkswagen Golf starts at around £27,000. The equivalent VW ID.3 starts above £35,000. Since insurance premiums are partly based on replacement value, a more expensive car produces a higher base premium regardless of its technology. As EV prices fall and the market broadens, this effect diminishes - but for the current fleet, higher purchase prices remain a persistent driver. 

What Thatcham is doing about it 

In March 2026, Thatcham Research published its EV Blueprint - a framework of eight specific requirements directed at vehicle manufacturers, battery producers, repairers and insurers. The chief executive, Jonathan Hewett, framed the stakes directly: the transition to electric vehicles "cannot succeed if EVs become economically unviable to insure and repair." 

The blueprint's core argument is that too many repairable EVs are being written off because design choices at the manufacturing stage - prioritising assembly efficiency over post-accident repair - create unnecessary barriers to economic repair. The recommendations include resettable emergency safety systems, standardised battery removal processes, accessible diagnostics comparable to existing on-board systems for ICE vehicles, and modular battery construction that would allow damaged sections to be replaced rather than the entire pack. 

Testing of more than 8,000 EVs found that 8 to 9-year-old vehicles retain a median 85% of their original battery capacity. A battery that lasts a decade in service can be economically repaired and retained - but only if the design standards exist to support that repair pathway. 

Dan Harrowell, Thatcham's principal engineer for advanced technologies, noted that EV repair costs have already decreased by 10.7% as repair centres have gained experience. The infrastructure is developing. It has not yet caught up with a market that now accounts for 26.5% of new car registrations. 

Running costs: the full picture 

Despite higher premiums, running an EV in the UK costs approximately £500 to £1,000 less annually than a comparable petrol car when fuel, servicing and road tax are factored together. Home charging at around 24p per kWh costs roughly 7 to 9 pence per mile against approximately 16 pence per mile for petrol. EV servicing costs run 30 to 40% below an equivalent ICE car - no oil changes, no timing belts, no exhaust systems, no clutch, and regenerative braking significantly reduces brake pad wear. From April 2025, EVs pay VED for the first time, at £10 in year one then £195 per year, but this still sits below the road tax burden on higher-emission petrol and diesel vehicles. 

The insurance premium is a genuine headwind. For drivers who charge primarily at home, it is not large enough to reverse the overall cost advantage. For drivers who rely heavily on public rapid charging - typically 65 to 79 pence per kWh - the fuel cost advantage narrows considerably and the insurance cost becomes a larger share of the total.

The direction of travel 

The gap is closing. Eleven new insurance products began quoting for EVs on a major price comparison platform in 2024, compared with just three to four new products for petrol, diesel or hybrid models, according to Consumer Intelligence data - many offering EV-specific features such as cover for charging equipment and EV-specific breakdown assistance. Specialist EV insurers are entering a space previously dominated by standard motor insurers pricing EV risk conservatively. Mainstream comparison platforms carry larger panels of EV-specific policies. 

The broader motor market is adding its own pressure. EY forecasts a combined ratio of 111% for the UK motor market in 2026 - meaning insurers will on average pay out £1.11 in claims and expenses for every £1 of premium written. Martin Hall, managing director at ERS, told Insurance Business: "If the cost of claims goes up, premiums need to go up to counterbalance it." The repair inflation driving the whole motor market is being amplified in the EV segment by the structural factors above. 

The answer to whether EVs cost too much to insure: currently more than petrol equivalents, yes - by a gap that is narrowing but not yet closed. The premium is one cost in a total cost of ownership calculation that still, for most drivers, favours electric over petrol. Whether that holds depends on whether the repair industry keeps pace with the market.