We have explained to our readers that auto insurance companies are increasing their premiums due to the escalating costs of vehicle repairs. Electric vehicles are written off by some insurers, even if they have minor accidents. It's not cost-effective to repair these complex systems. The costs for insurers to repair EVs are staggering.
The New York Times reported that a Rivian owner claimed his R1T electric pick-up truck was involved in minor fender-bender in Columbus, Ohio in February. The insurance company for the driver who hit Chris Apfelstadt’s R1T offered $1,600 to cover the repair costs.
The cost of repairing the R1T at a Columbus certified repair shop was $42,000, or half the price of the original EV.
The accident caused damage to a panel that runs from the rear of the truck up to the front roof pillars. The NYT reported that the cost of repairing and repainting the truck was high, as it required removing the headliner and the ceiling material in the cabin.
The high costs may also be attributed to "Rivian’s small size , and its youth . "Like other auto start ups, based in Irvine in California, it has not sold through franchised dealerships and had to create an independent repair network, from scratch," continued the newspaper.
Experts in the auto industry have stated that repairing EVs costs more than fixing gasoline-powered vehicles. In March, we published a piece titled "Not ESG-Friendly": Insurance Companies Junk Whole EVs for Minor Accidents. One minor accident can damage the battery pack. If this happens, you will have to replace it at a cost of tens or even hundreds of thousands of dollars.
Auto insurance rates have also risen as the cost to repair not only EVs, but all vehicles in the past few years has resulted in significant losses for the big insurance companies. State Farm, America's biggest insurer, lost 28 cents on every premium it wrote in 2022. State Farm's auto division posted a loss of $13 billion.
You've probably heard people say, "I wish that they still made cars this way." Although we agree that technology in cars is advantageous, the cost of repair and maintenance is prohibitive. In the past, before microchips were introduced, anyone could fix these simple machines, and even change their oil, with the right tools. Complex automobiles are a problem.