Electric Vehicles Present New Insurance Challenges
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
Electric vehicles (EVs) continue to gain traction in the U.S. auto market. Last year, Americans bought nearly 450,000 EVs—an 83% jump over 2020. With many federal and state governments pushing for lower CO2 roadway emissions, EV demand is expected to soar during the next decade.
This has commercial fleet owners wondering what a world without gas- and diesel-powered vehicles might look like, particularly when it comes to the potential exposures EVs could create. This article discusses the risks that could impact insurance costs for EV fleets.
Unique EV Risks
Because EVs tend to cost more than standard automobiles, their insurance rates are usually higher. However, other factors unique to EVs could also make insuring them costlier. Such factors include:
- Cyberthreats—Like most new cars and trucks, EVs offer connected car technologies such as Wi-Fi, data sharing and semi-autonomous systems that leave them vulnerable to cyberthreats. However, the public charging stations EVs rely on to recharge their batteries add another layer of risk. Charging stations may serve as an entry point for malware attacks, data theft, system outages, bugs and glitches. What’s more, once a data breach occurs in a single vehicle, it may be easier for a malicious party to access the rest of the fleet.
- Battery problems—There are several risks associated with EV batteries that can potentially impact commercial fleets. For example, battery manufacturing defects can lead to large-scale vehicle recalls, putting fleet owners at an increased risk of business delays. Additionally, under certain conditions, lithium-ion batteries that power EVs can ignite or explode. Notably, battery fires burn longer and hotter, release more toxic fumes and liquids, and spread faster over a larger area than traditional fires. Such an incident would create a whole new set of insurance challenges.
- Pedestrian accidents—One selling point of EVs is they run quieter than gasoline-powered vehicles. Unfortunately, this lack of audible engine noise may also put pedestrians at greater risk of being hit if they fail to hear an approaching EV.
Other Considerations
While uncertainty about new EV technologies will likely drive up insurance premiums initially, expectations are that prices will stabilize over the long term. Meanwhile, several other concerns will need to be addressed before EVs become scalable. These include the following:
- Scarcity of repair shops and parts—Very few auto shops can handle EV repairs, so it may be difficult to find timely service. Further, shops that do fix EVs often have trouble locating parts. This is partly because four key elements essential to battery technology—cobalt, graphite, nickel and lithium—are currently in short supply. Even if supplies can eventually catch up with surging demand, EV auto shops will remain at risk for supply-chain delays, as these rare elements are sourced from distant regions all over the globe.
- Costlier repairs—Most EV parts cost significantly more than parts for gas-powered vehicles. Batteries are especially high-priced and vulnerable to harm. An accident that might be a fender-bender on a standard car could result in an EV’s total loss if the battery takes serious damage. Adding to costs, EV repairs usually require more labor hours. This is in part due to EV technology’s increased complexity as well as auto mechanics dealing with the learning curve of working on unfamiliar machinery. As a new generation of technicians gains experience, repair times should shorten.
- Extreme weather concerns—It’s unclear how much of a role extreme weather will play in EV battery performance. Under severely hot temperatures, batteries, on rare occasions, have been known to ignite or explode. Under cold temperatures, batteries hold their charges for a shorter period of time. However, it’s unknown whether these drawbacks are significant enough to make EVs impractical in certain weather conditions or climates.
- High voltage hazard—A number of high-voltage electric cables run throughout the body of EVs. When an accident occurs, exposed cables could cause serious injury to passengers or first responders trying to free crash victims from damaged vehicles.
Conclusion
Although it probably won’t happen overnight, EVs seem positioned to dominate roadways sometime in the near future. Commercial fleet owners who start thinking about EV insurance challenges today will be better positioned to thrive in a post-fossil-fuel landscape.
Contact us today to learn more about insurance for EVs.
- Published in Blog
Quick Tips: Save Money on Energy in Your Household
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
According to the National Energy Assistance Directors Association, energy costs will reach a decade-long high this winter. Heating costs are predicted to rise 28% for U.S. households relying on natural gas and 27% for those using heating oil. Electricity costs are also anticipated to increase 10% per the U.S. Energy Department. Read on for tips on how you can lower the energy bills for your home.
Why Are Heating Costs Rising?
Many factors have contributed to the rapidly increasing energy costs this year including the following:
- A predicted colder-than-average winter
- Rising wholesale gas prices
- Depleted energy stores from increased demand during the 2020 and 2021 lockdowns
- Lowered supply stemming from financial sanctions put on Russian oil after the invasion of Ukraine
How Can I Reduce Energy Costs in My Household?
With skyrocketing prices, you may be wondering how you can reduce or control your winter utility bills. Many may be tempted to simply turn down the thermostat. Fortunately, there are ways you can lower your energy bills while staying warm this winter.
Here are some tips to help you lower your energy bills:
- Use a programmable thermostat to automatically lower your temperature when you’re not home.
- Seal areas where heat could escape from your windows and doors.
- Ensure radiators and vents are unobstructed.
- Open curtains and windows during the day and close them at night.
- Replace your furnace filter if it’s dirty.
- Have a professional inspect your HVAC systems for leaks.
- Close the vents and shut the doors to rooms you’re not using.
- Consider other sources of energy waste (e.g., leaky faucets, inefficient light bulbs).
Cold weather may make some increased energy costs inevitable. By using the above tips, and consulting the Department of Energy’s Energy Saver Guide, you can be well on your way to managing your winter utility bill.
For additional winter home safety tips, contact us today.
- Published in Blog
Combating Rising Benefits Costs During Periods of High Inflation
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
The U.S. inflation rate has increased by 8.3% over the last year, according to the Bureau of Labor Statistics (BLS). This has led to significant price increases across various consumer goods as well as employee benefits such as health insurance. In fact, one-third of U.S. employees have already seen an increase in their health costs in the last year, a survey conducted by the Employee Benefit Research Institute reported.
This increase in costs presents challenges for employers facing one of the most difficult hiring markets in recent memory. Luckily, there are some strategies employers can utilize to mitigate increasing benefits costs without shifting the burden to employees, thus remaining attractive to current and prospective employees.
Eliminate Underutilized Benefits
One simple strategy is to eliminate underutilized benefits. Resources from unused benefits can then go towards more expensive benefits. An easy way to evaluate which benefits best suit a company’s needs is to regularly send out benefits surveys to the company’s employees. These surveys can help employers know which available benefits may not be providing value to the company.
Wellness Programs
While there are skeptics and believers when it comes to actual cost savings provided by wellness programs, they often play an important role in other positive workplace developments. For instance, promoting and achieving a healthy workforce often improves morale and productivity. These programs are also valuable because they can lead to improved employee attraction and retention as well as increased loyalty to the employer.
There are a variety of wellness benefits employers can offer to suit the needs of their company. Potential options include providing in-office perks for nutrition, fitness and stress management, or gym memberships.
Telemedicine
Taking time off to go to the doctor can often be a time-consuming and expensive undertaking. Telemedicine may help lessen these issues by eliminating associated costs, such as transportation, and providing faster and more affordable care to those seeking medical services. By meeting with health care providers over the internet, employees can get the care they need more quickly and are likely to be more productive as a result. Additionally, telemedicine allows employees to take less paid time off of work and makes it much easier for them to avoid obstacles that could get in the way of seeking health care, such as child care.
Conclusion
As employers adjust to increasing inflation rates and the rising costs that follow, there are several strategies they can use to help offset the severity of these increases. From providing wellness programs to facilitating the use of telemedicine, employers will need to think carefully about which strategy would work best for their unique situation.
Contact us today for more inflation-related content.
- Published in Blog
What You Need to Know About the Biden-Harris Administration’s Actions to Prevent Surprise Billing
This article is from RISQ Consulting’s Zywave client portal, a resource available to all RISQ Consulting clients. Please contact your Benefits Consultant or Account Executive for more information or for help setting up your own login.
On July 1, 2021, the Biden-Harris Administration, through the U.S. Departments of Health and Human Services (HHS), Labor, and the Treasury, as well as the Office of Personnel Management, issued “Requirements Related to Surprise Billing; Part I,” an interim final rule with comment period that will restrict surprise billing for patients in job-based and individual health plans and who get emergency care, non-emergency care from out-of-network providers at in-network facilities, and air ambulance services from out-of-network providers.
This first rule implements several important requirements for group health plans, group and individual health insurance issuers, carriers under the Federal Employees Health Benefits (FEHB) Program, health care providers and facilities, and providers of air ambulance services.
What is a surprise medical bill?
When a person with a group health plan or health insurance coverage gets care from an out-of-network provider, their health plan or issuer usually does not cover the entire out-of-network cost, leaving them with higher costs than if they had been seen by an in-network provider. In many cases, the out-of-network provider can bill the person for the difference between the billed charge and the amount paid by their plan or insurance, unless prohibited by state law. This is known as “balance billing.” An unexpected balance bill is called a surprise bill.
This rule protects patients from surprise bills under certain circumstances.
Who will benefit from this rule?
These surprise billing protections apply to you if you get your coverage through your employer (including a federal, state or local government) or through the federal Marketplaces, state-based Marketplaces or directly through an individual market health insurance issuer.
The rule does not apply to people with coverage through programs such as Medicare, Medicaid, Indian Health Services, Veterans Affairs Health Care or TRICARE. These programs already prohibit balance billing.
Who is affected by surprise bills?
Surprise medical bills and balance bills affect many Americans, particularly when people with health insurance unknowingly get medical care from a provider or facility outside their health plan’s network. This can be very common in emergency situations, where people usually go (or are taken) to the nearest emergency department without considering their health plan’s network.
An in-network hospital still might have out-of-network providers, and patients in emergency situations may have little or no choice when it comes to who provides their care.
For non-emergency care, an individual might choose an in-network facility or an in-network provider but not know that a provider involved in their care (for example, an anesthesiologist or radiologist) is an out-of-network provider.
How does this rule help?
If your health plan provides or covers any benefits for emergency services, this rule requires emergency services to be covered:
- Without any prior authorization (meaning you do not need to get approval beforehand)
- Regardless of whether a provider or facility is in-network
This rule also protects people from excessive out-of-pocket costs by limiting cost sharing for out-of-network services to in-network levels, requiring cost sharing for these services to count toward any in-network deductibles and out-of-pocket maximums, and prohibiting balance billing under certain circumstances. Cost sharing is what you pay out of your own pocket when you have insurance, such as deductibles, coinsurance and copayments when you get medical care.
The protections in this rule apply to most emergency services, air ambulance services from out-of-network providers and non-emergency care from out-of-network providers at certain in-network facilities, including in-network hospitals and ambulatory surgical centers.
Additionally, this rule requires certain health care providers and facilities to furnish patients with a one-page notice on:
- The requirements and prohibitions applicable to the provider or facility regarding balance billing
- Any applicable state balance billing prohibitions or limitations
- How to contact appropriate state and federal agencies if the patient believes the provider or facility has violated the requirements described in the notice
This information must be publicly available from the provider or facility, too.
When does the rule take effect?
Consumer protections in the rule will take effect beginning on Jan. 1, 2022.
The regulations are generally applicable to group health plans and health insurance issuers for plan years beginning on or after Jan. 1, 2022, and to FEHB program carriers for contract years beginning on or after Jan. 1, 2022. They are applicable to providers and facilities beginning on Jan. 1, 2022.
- Published in Blog
