Electric vehicle motor claims – a changing landscape

What we think - EVs are safer, but claims economics will get tougher before they get better

It’s often assumed that EVs will cut claims costs because they cause fewer injuries and have fewer moving parts. In reality, the next three to five years look more uncertain. While the number of claims may fall slightly, repair costs are likely to stay high due to expensive batteries, ADAS recalibration, and limited repair capacity. The insurers and fleets that succeed will be those that adapt claims handling, write-off thresholds, and repair routes for EVs—rather than treating them like traditional petrol or diesel vehicles.

A motor claims environment under pressure

Motor claims are increasingly shaped by supply chain disruption, rising repair costs, advancing vehicle technology and the rapid growth of the EV market. Together, these forces are creating a landscape defined by overlapping cost and complexity pressures. As a result, insurers are navigating claims outcomes heavily influenced by factors outside their direct control.

Global disruption continues to affect parts availability, with shipping delays and rising fuel prices adding time and cost to repairs. While average repair lifecycles have improved from 35 to 30 days, these efficiencies have not yet translated into lower overall claims spend. Costs remain elevated relative to historic norms, and both credit hire and settlement expenses continue to run high—despite meaningful operational improvements across the repair and claims process.

Parts inflation and the shift towards green parts

Parts inflation has risen by 35% since 2020, particularly across frequently damaged components. In response, the industry is increasingly adopting recycled “green” parts up by as much as 47% to reduce delays and avoid unnecessary write offs. As the link between cost control and sustainability strengthens, reassurance and clear communication are becoming essential to address policyholder concerns around the use of recycled components.

Electric vehicles and repair network challenges

Commercial EV uptake has surged by 520%, driving higher repair volumes and added complexity. EV repairs now average £3,408 and take around 21 days to complete. Repairers are investing in specialist equipment and training, even as labour rates struggle to keep pace with rising operational costs. This shift is contributing to higher write off rates for EVs, while financial and capability pressures on smaller repairers may accelerate consolidation within the repair network market.

If an EV’s battery pack is damaged, it can turn an otherwise fixable vehicle into a total loss because batteries are expensive and manufacturers have strict safety rules about repairs. To manage this, set total loss limits specifically for EVs and approve expert battery checks early in the claims process. If possible, use module-level testing and remanufactured battery solutions through trusted partners to avoid unnecessary write-offs.

Case in point — what EV‑specific routing can achieve

A large commercial fleet made improvements by using Vehicle Identification Number (VIN) level checks and sending EV accidents to a small group of specialist repair centers with in-house calibration. Over a year, they saw big drops in average repair costs, fewer calibration mistakes, and shorter repair times. These improvements came from routing vehicles to the right place the first time and making faster technical decisions.

These results match industry findings that sending EVs to the right repair centers early is one of the best ways to control repair costs and make claims easier. (Source)

Managing complexity through capability and insight

With 60% of vehicles sold globally now equipped with Level 2+ ADAS features, recalibration requirements are becoming a routine part of repairs. Jobs that were once straightforward such as windscreen replacements, now demand specialist workshop equipment and advanced technical expertise. This increasing complexity is driving longer off road times and reinforcing insurers’ reliance on approved repairer networks with diagnostic and calibration capability.

In injury claims, some claimants are increasingly layering injuries to work around whiplash reforms, creating upward pressure on settlement costs. While some insurers have achieved savings of around £1.1 million by taking firmer positions on these cases, many are also turning to AI to analyse claims data, identify patterns and guide handler decision making. These data led approaches support more consistent and controlled outcomes without automating decisions entirely, contributing to meaningful improvements in both claims performance and service quality.

What changes next — a 3–5 year outlook

• Repair centers are merging and getting bigger, as ADAS calibration and high-voltage safety mean repairs need more specialist skills and equipment. There will be fewer but more advanced repair hubs, so fleets should review their service agreements and consider how far vehicles may need to travel for repairs
• Insurers will use battery health and software information, not just age and mileage, to set electric vehicle insurance prices. Fleets should start tracking battery health to get better deals
• Manufacturers will first allow more independent repairs and calibration, but may later tighten control with software updates. Businesses should plan for both manufacturer-approved and independent repair options
• Recycled parts will become common, starting with petrol and diesel vehicles, and then for electric vehicles. Certified recycling programmes will cover many EV parts, but batteries will still be treated differently
• Claims handling will rely more on software. When a claim is first reported, technology will check the vehicle’s details, ADAS features, and calibration needs, sending it to the right repair centre straight away

How we’re helping clients lead and not just cope

We’re working proactively with clients and insurer partners to navigate these shifting claims pressures with clarity and confidence. By combining market insight, data‑led analysis and strong relationships across the repair and supply chain, we help clients stay ahead of trends that drive cost and complexity. Our dedicated claims specialists are focused on achieving better outcomes, supporting faster repairs, reducing avoidable costs and advocating firmly on your behalf when it matters most.

If you’d like to understand how these changes may affect your fleet or motor programme, or want guidance tailored to your business, speak to the Howden team to find out more here: [email protected]