Jackson Lee Underwriting has today announced the launch of a new market first GAP policy for hybrid and electric vehicles. In a total loss situation, the new policy, called Electric Vehicle GAP, provides an additional benefit for the ‘gap’ between the current value and the full cost of a replacement battery or the early termination charge on the lease.
Component parts of electric vehicles are expensive with up to 50% of the on the road vehicle price being the electric battery. Manufacturers tend to recycle the battery to reduce costs and make the vehicles affordable to buy and this means many customers lease the battery in electric or hybrid cars. This creates an unusual situation where customers have a vehicle part owned and part leased.
Despite this, GAP policies for electric vehicles do not currently provide full replacement cover as standard for batteries, so in the event of a total loss where the battery is damaged beyond economical repair, customers could be left liable for the full replacement cost of the expensive battery or a hefty early termination charge on the battery lease.
Nick Mohan, Joint Managing Director of Jackson Lee Underwriting, explains: “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. 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.”
Jackson Lee has launched the market’s first ‘AA’ rated Electric Vehicle GAP product to remedy this issue.
Nick Mohan continues: “Conventional GAP insurers have not kept pace with the rate of change in the automotive sector. Jackson Lee never stands still on product innovation – continually looking for new and emerging exposures like this where we can add value through quality insurance solutions. The UK now represents the largest electric vehicle market in Europe and it is predicted to grow by a further 70,000 vehicles this year taking the overall electric vehicle market to over 200,000 units. By 2020 it is predicted that there will be 1,000,000 electric vehicles operating in the UK*. 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.”
The product will be available to brokers through Jackson Lee’s online broker facility ABEL.
For further information, please contact SJ Wrigley at Spotlight Consulting on 07909546104 or firstname.lastname@example.org
*Society of Motor Manufacturers and Traders (SMMT) and Chargemaster PLC.
Jackson Lee Underwriting is an MGA with offices in London, Devon and Warwickshire. It has been the BIBA approved GAP scheme provider since 2012 and specialises in bringing a broad range of innovative niche insurance products to the broker market.