Modern Insurance Magazine Issue 65

A Total Loss Could
Be An Electric Gain
James Roberts, Head of Insurance Sales for Europcar, explains how a collaborative partnership between insurers
and replacement vehicle supply can go a long way towards supporting the Government’s zero emissions goals.
A recent government inquiry by the House
of Lords Environment and Climate Change
Committee highlighted that ‘surface transport is
the UK’s highest emitting sector for CO2, with
passenger cars responsible for over half those
emissions.’ The report released by the Committee
stated that ‘progress is not happening fast enough,
and major barriers remain,’ including charging
anxiety and the cost and availability of vehicles.
A pervading culture of misinformation was also
identified as a key issue in deterring motorists from
making the switch.
Europcar is monitoring driver sentiment about
switching to EV, and early signs suggest that
there’s still a long way to go to persuade ICE
motorists that now is the time to make the move.
At the start of the year, our ‘Barriers to EV’
barometer found that 62% of motorists cited cost
(purchase, maintenance and finance options) as
the biggest barrier. 46% cited the lack of charging
infrastructure. Yet the reality is that the availability
of electric vehicles is getting better all the time,
and the charging infrastructure has grown
significantly in the last 12 months.
Real-world experience
The job that needs to be done across the motoring
landscape – from the Government and charging
companies, through to the OEMs and insurers
– is to overcome the FUD (fear, uncertainty and
doubt). Motorists need to experience electric
motoring first-hand – and in real-world conditions
(not just a short test drive) – to see just how easy
it is.
Clearly there are still some big hurdles to
overcome. However, we have identified that
the less-than positive experience of a Total Loss
could be the ideal entry route for drivers to find
out about electric motoring. We are working with
several insurance providers to get more drivers
behind the wheel of an EV.
Turning a Total Loss into an Electric Gain
As everyone knows, a customer whose vehicle
is deemed a Total Loss needs an alternative
for as much as a month. For many insurers, this
means leaving the replacement vehicle provider
to offer whatever is available from their local
branch without any reference to the policyholder’s
needs. However, we believe there should be an
alternative that will not only enhance the customer’s
claims experience; it will also bring electric driving
to a wider motoring public.
By offering the option of an electric replacement
vehicle as part of the Total Loss claim, the
policyholder gets a ‘try before you buy’ EV
experience without having to think about any of the
barriers. Delivered through our dedicated insurance
contact centre, which has a team of EV champions
who can access our entire fleet of electric vehicles,
this solution is playing a fundamental role in shifting
perceptions and encouraging more ICE motorists
to try an EV in the real world. More than 60% of
the Europcar network is electrified, giving us full
UK EV coverage. EV champions at the majority of
locations also provide a further level of confidence
for new electric drivers.
We work with the insurer to agree when to offer
policyholders an EV instead of a like-for-like ICE
vehicle. The agents then contact the policyholder to
discuss the options in detail. Once the customer has
selected a vehicle, we can deliver it to their home or
work address for ultimate convenience. Currently,
we are seeing 1 in 3 suitable policyholders stating
that they are happy to try out electric motoring.
Winning EV customer loyalty
For insurers stepping into the EV marketplace,
the other big conundrum lies around how to
handle customer expectations when it comes to
replacement vehicles. Sales of fully electric cars hit
the 1 million mark 1 at the start of 2024, putting new
pressure on insurers to provide EV replacements.
In addition, with Consumer Duty now a big focus
for insurers, it is critical that the replacement vehicle
supply chain is fit for purpose.
Relying on a sole supply partnership brings
vulnerability to regulatory scrutiny if a
policyholder’s choice is limited. It also puts the
customer relationship at risk. Replacement vehicles
form a fundamental component of a motor
insurance claim, and a lack of suitable options
can be catastrophic for customer satisfaction. In
contrast, if the service goes above and beyond
expectations, it leaves a lasting positive impression.
To find out more about Europcar Insurance
Solutions, visit europcar.co.uk/business
James Roberts,
Head of Insurance Sales,
Europcar Mobility Group UK
1 https://www.smmt.co.uk/2024/02/uk-reaches-million-evmilestone-as-new-car-market-grows/
MODERN INSURANCE | 53