Why Electric Trucks Will Cause Rig Insurance Prices to Soar
Most CDL drivers enjoy a hearty laugh when presented with the notion of electric big rigs. While it seems to work well for passenger vehicles, electric vehicle (EV) technology is too expensive and too heavy to power a big rig, especially for the long distances US drivers tackle every day.
Still, the technology is young. We don’t have decades of statistics to compare the pricing of lithium-ion batteries in a rig to that of a diesel engine. But owner operators and fleet managers realize that electric big rigs will eventually be more common on the roads, particularly for lighter, intrastate loads. And manufacturers like Tesla, Daimler and Volvo are already putting electric trucks on the market in 2023.
So, how could electric trucks affect your rig insurance prices? They will likely drive trucker insurance prices very high. Let’s explore some potential realities to understand why.
EV Batteries Are Heavy, Which Will Drive Rig Insurance Prices Up
Rig insurance prices are all about the potential risk. Truck insurance companies consider a lot of information when creating risk groups and rates, such as:
- Weight of the vehicle
- Flammability and flashpoint of hazardous materials
- Driver age and experience
- Garage location and theft incidents nearby
- Driver and company claims history
- Costs to repair individual makes and models
- Annual mileage
- And more
Now, the heavier a vehicle, the more damage it can cause if a driver were to lose control, even when “deadheading.” Truck insurance companies will consider that. Then, there is the mileage issue.
A Heavier Rig Equals More Trips and More Risk
You already know that a loaded rig must not weigh more than 80,000 lbs here in the US. On a dedicated route, a heavier rig increases the number of trips, and the number of miles annually, to deliver the same amount of freight. From the insurer’s perspective, more trips and miles equals more risk.
Now, Tesla claims they can manufacture a rig with a weight increase of less than one ton, if you consider the reduced weight of no diesel fuel. And it’s only a matter of time before EV technology becomes smaller, lighter and more efficient.
If you don’t believe us, think about computers in the 1970s. They took up an entire room and had less computing power than your cell phone.
In the meantime, insurers need to think about other ways this new technology can cause damage to other drivers, vehicles, structures and freight.
Combustibility Concerns & Location
After Hurricane Ian in 2022, EVs in Florida started bursting into flame. We’re still learning about what happened, but it seems like water damaged the lithium-ion batteries, which caused them to combust. This type of fire risk is precisely what keeps insurance actuaries — the people who study risk professionally — awake at night.
Imagine the damage one exploding semi could cause at your favorite Love’s truck stop on a busy day! The loss of life and property would be enormous. We’re talking about hundreds of millions, if not billions, of US dollars. Semi-truck insurance companies don’t want to be on the hook for that. Can you blame them?
So, insurers in states that endure coastal hurricanes, like Florida, Texas and South Carolina, might charge higher premiums to cover that risk.
But ultimately, electric rigs are coming. Like computers and cell phones, it might take 50 years before we master the technology. And there will likely be some hybrid trucks on the market soon, even though the longest routes through US deserts will rely on diesel machines for years to come.
As Trucker Tech Evolves, Truck Insurance Will Change
Trucking technology changes every year. And the team at JEB Insurance is here to help owner operators and fleet managers get the best prices on rig insurance, no matter what changes happen in the industry. Contact us today to get a quote, and check out our blog for more industry news.
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