Repairable EV collision claims on the rise – report

Repairable EV collision claims on the rise – report | Insurance Business Canada

Motor & Fleet

Repairable EV collision claims on the rise – report

Growing frequency of claims seen in both Canada and the US

Motor & Fleet

By
Mika Pangilinan

There was an increase in the frequency of repairable claims for electric vehicles (EV) during the first quarter of 2023, according to a new report by Mitchell, a technology and information provider for the P&C and collision repair industries.

Shedding light on EV collision trends, the report indicated that the US witnessed a rise in repairable claims frequency to 1.13%, while Canada experienced a higher increase at 2.41%.

Comparing data from Q4 2022 and Q1 2023, the report also found that EV average repairable severity has decreased to $4,749 in the US and $6,406 in Canada. Despite the decrease, these figures remain higher than the average for internal combustion engine (ICE) vehicles, according to Mitchell.

The report also revealed that OEM parts usage and the percentage of parts repaired increased to 90.76% and 12.68%, respectively.

Additionally, refinish time rose to nearly an hour more than for ICE automobiles, which has added to claim costs.

“EV sales broke records in 2022 and the combination of high gas prices, government incentives and increased vehicle production helped drive consumer demand,” said Ryan Mandell, director of claims performance at Mitchell. “With more EVs on the road, there will naturally be more EV collision claims. That puts a strain on auto insurers, who must balance policyholder expectations with higher-than-average vehicle repair costs and cycle time. It also puts a strain on collision repairers tasked with properly and safely restoring these automobiles to OEM standards.”

“The number of cases is going to increase, so the handling of batteries is a crucial point,” Christoph Lauterwasser, managing director of the Allianz Centre for Technology, told Reuters last March.

According to the International Energy Agency (IEA), global EV sales are projected to grow by 35% this year, reaching an estimated 14 million units by the end of 2023. If these projections hold true, the market share of EVs in the overall car market would have risen from approximately 4% in 2020 to 14% in 2022 and 18% in 2023.

What are your thoughts on this story? Feel free to comment below.