For the first time, the Association of British Insurers (ABI) has incorporated guidance for EV's in its updated Salvage Code published in May 2025. This is a set of voluntary but widely adopted standards to regulate how vehicles are assessed after an accident, to determine if they are safe to repair or should be scrapped. Its aim is to protect the public, deter insurance fraud and ensure transparency. With the evolving EV landscape, this introduces critical considerations for risk evaluation and policy development.
Assessor training and salvage categorisation
The Code has called for Assessors trained in handling high voltage systems and to be familiar with manufacture repair procedures to make accurate decisions. This is in line with the advice published by The Health and Safety Executive (HSE) which calls for deeper knowledge, skills, tools and equipment for those working with EV's. It also addresses storage of high voltage vehicles/batteries and the risks of electric shocks.
The changes to the Salvage Code address the complexities of EV's, particularly those with high voltage battery systems. The key updates include four new categorisations for EV's distinguishing between structural and non-structural damage to high voltage batteries.
Damage to a vehicle's battery pack, especially structural battery enclosures integrated into the chassis can now result in a category A/B classification meaning the vehicle must be scrapped and cannot return to the road. This is to allow greater transparency for consumers when considering the history of vehicles for sale. This reflects the growing concerns over the risk and repairability of compromised EV batteries.
Lithium–on battery risks
Charging infrastructure and legal liability
Underwriting and claims implications
EV battery damage may lead to more category A/B write offs increasing total loss pay outs. An increase in credit hire claims involving EVs, with fleets currently under-resourced will follow. Underwriting policies may need to make allowances for battery degradation, charging behaviour and fire risks. Faulty chargers or battery fires may lead to third party and subrogation claims. All this has the potential to push up claims costs and ultimately premiums – as reported in the POST, repairs and total loss payments now make up a significant portion of insurer payments out.Strategic recommendations
Collaboration between insurers, manufacturers, infrastructure providers and regulators is essential. As EV technology continues to evolve so too must the frameworks that govern its safe and responsible use. Insurers should invest in assessor training, update underwriting models to reflect battery related risks and collaborate with infrastructure providers to understand liability exposure from public and private charging stations.
The government's current public consultation in safety principles, safety standard and safety performance in Automated Vehicles will go some way towards addressing risks, liability and safety in EV's. If the government want to go quickly with all this, they need to support the related legislation, including the Lithium-Ion Battery Bill, or provide government-led replacement legislation.
Thank you to Petty Abrams for contributing to the production of this article.
