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Electric vehicles and insurance - the maturing market as your next car will probably be your NextGreenCar.

The NextGreenCar Awards were published last month. What was striking to reflect on was not just the advance in technology (and utility, and styling) that the winners represented) but the sheer diversity of cars that could receive the accolade. There were eleven different categories of winner.

Who would have said, back in 2000, when the Toyota Prius went on worldwide sale, that today we'd have such a diversity of low carbon vehicles?  The winners of this year's Next Green Car Awards give a snapshot of this progress. From the positively cutesy styling of the new VW e-up! (which will give the Fiat 500 a run for its money) to the full on, sleek, executive luxury of the Tesla Model S, electric vehicles are a pretty broad church. 

There's even a proper workhorse in the line up: the Nissan Leaf e-NV200, a fully electric, pallet bearing van. From an insurance industry perspective, there's been evolution too. Over ten years ago, when the Prius was launched, GAP insurers were concerned about the depreciation of the vehicle. There was no previous experience to go on. Back issues of Autotrader were useless to us. We had to take a critical look at what we were insuring and take a stab at the risk. After all, a car that becomes worthless pretty rapidly is a big risk to a GAP insurer (to take an extreme example, if a car insured for £20,000 is deemed worth only £2,000 at the point of loss a year later, we would be covering a pretty big gap).

And with electric vehicles, initially we had particular concerns. The main difference between an electric vehicle and a petrol or diesel is that an electric car is fuelled by a battery. The life of the car depends on the battery - and how well it recharges over time. Would the batteries be scrap after three years? Would the cars have any second hand value at all? However, time has told a different story. Not only do batteries last longer than expected, but electric vehicles have shown that they hold their value well. The residual value (as we call it in the industry) has proved to be very similar to that of the average vehicle and in some cases it's actually better than average. People want to buy electric vehicles both new and second hand. This is born out by the figures. In the last four years over 17,000 electric vehicles have been registered in the UK. Electric vehicles are in use in pool car fleets, by individuals and in car clubs. It's not surprising that we have better data on sales and resales to go on. With this increase in use - and with the associated data - the risk of insuring electric vehicles is now quantifiable and well researched. The insurance framework we offer means that electric vehicle owners can be fully covered against accident or other mishap. There's no difference in cover between GAP insurance (which offers cover for finance repayments and to guarantee the value of vehicles) for electric or hybrid cars and petrol or diesel ones.

And whilst the insurance framework for low carbon vehicles is now standard, the burgeoning charging infrastructure means that refuelling is also becoming mainstream (take a look at Zap Map for the detail). Taken with immeasurable improvements in range (the Tesla boast 240 miles on one charge), long distance travel has become normal for electric vehicles. 

There's no reversing this trend. Barely a month goes by when we don't insure an electric vehicle. Electric vehicles are here to stay.

The full list of Next Green Car award winners: nextgreencar

First published on 'The Diary of a Serial Car Lover', the Direct Gap blog.

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