Jackson Lee Underwriting has launched what it described as a market-first GAP policy for electric and hybrid vehicles that centres on the expensive electric battery.
According to the managing general agent (MGA), electric batteries’ high price tag is seeing manufacturers recycling that component not only to reduce costs but also to make the vehicles affordable for buyers – meaning users of electric or hybrid cars lease the battery.
“This creates an unusual situation where customers have a vehicle part owned and part leased,” said Jackson Lee Underwriting, which came up with “Electric Vehicle GAP” to provide an additional benefit for the difference between the current value and the full cost of a replacement battery or the early termination charge on the lease, in cases of total loss.
The MGA cited a gap when it comes to GAP policies for electric vehicles.
“Even where a GAP insurance policy has been purchased, GAP insurers do not cover the full replacement cost of the battery or necessarily the early termination charge,” explained Nick Mohan, joint managing director at Jackson Lee Underwriting. “With batteries often costing up to 50% of the total vehicle value, this leaves customers with potentially a significant outstanding debt on finance on the battery lease.”
With the UK now representing the largest electric vehicle market in Europe, the firm sees huge potential. Its AA rated product is available to brokers through the MGA’s online broker facility ABEL.
“By 2020 it is predicted that there will be 1,000,000 electric vehicles operating in the UK,” noted Mohan. “With extra government support announced in the Autumn budget, this represents a massive opportunity for brokers, so we are thrilled to be developing the market’s first electric and hybrid specialist motor GAP product.”
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Motor insurance may shift gear with rise of electric cars
