James Roberts, head of insurance sales at Europcar, talks through the challenges bodyshops and the motor supply chain are facing in matching customer expectations around electric vehicle rentals versus current available supply
What are some of the challenges the bodyshop sector is experiencing when it comes to supporting insurers with electric vehicle (EV) repairs and replacements?
The biggest challenge for the bodyshop sector is EV supply. The insurance industry is trying to align customer expectation with supply – as the adoption of EVs increases, the risk is that the bodyshop sector gets caught between insurer and policyholder expectations.
Europcar research found that 89% of EV owners expect their insurer to provide a like-for-like replacement if their vehicle is off the road. Of those EV drivers who required a replacement vehicle following an accident, only 65% actually received a like-for-like EV.
For many bodyshop operations, owning a fleet of EVs alongside internal combustion engine (ICE) models is a big commitment.
What is the reputational impact for insurers and bodyshop firms if customers’ appetite for EVs cannot be accommodated?
As EV ownership grows and drivers are making conscious decisions over their vehicle choice, customers will be less willing to compromise when it comes to getting an EV replacement.
For salary sacrifice or fleet customers, there is also a benefit in kind (BIK) consideration and personal tax liability for driving an ICE vehicle, which makes this conversation more complex.
The claims experience is critical in the policyholder-insurer relationship, with replacement vehicle provision being a fundamental component of a motor claim.
As well as being a key point of scrutiny for the regulator, a poor claims experience is acknowledged as a key trigger for lost customers, while a good experience enhances brand loyalty and retention.
Insurers, therefore, rightly expect their supply chain – including bodyshops – to do everything possible to remove friction and dissatisfaction from the claims experience.
Is there a difference between the replacement car service provided depending on whether the claim made is ‘at fault’ or ‘non fault’?
In non fault claims, the policyholder would generally receive a like-for-like EV. However, it gets more complex for at fault claims.
In practice, what tends to happen is the policyholder is provided with whatever vehicle the bodyshop has available as the insurer tries to control claims costs. This puts the onus on the bodyshop to manage the customer’s expectation – and potentially their dissatisfaction.
For the insurance sector to effectively support the electric vehicle parc – and manage customer expectations – it needs to get to a place where, irrespective of fault, an EV driver receives an EV as a replacement vehicle. The focus, therefore, needs to shift to ensuring the supply chain has access to EVs – cars and vans – as it needs them.
What proactive steps can the insurance sector take to ensure replacement EVs are provided when an insured’s EV is being repaired?
Because of the higher purchase cost of EVs, insurers are often charging customers more for an EV rental. This is only a short-term fix to a wider issue.
Tailored propositions are crucial for the insurance sector to provide replacement vehicle options that are fit for purpose.
Partnering with a rental company that has a comprehensive fleet of EVs available from a strong national network could help ease future supply pressures and targets.
