The Secrets Behind EV Insurance — and the Updates You Never See Coming

Think your car insurance only cares about accidents and repairs? Think again. With electric cars, even a tiny software update could land you with a surprise bill.

In this episode of Electric Car Chat, I reveal the shocking case of Tesla driver Chris Yearsley — charged £94 by his insurer simply for reporting a harmless over-the-air update. Only after public outcry did the company back down.

But that’s just the beginning. You’ll discover:
 ⚡ Why insurers may demand you report every software update — and what happens if you don’t.
⚡ The cybersecurity risks of wireless car updates, and how hackers could exploit them.
⚡ How connected cars are moving toward automatic payments for tolls, parking, and even fines.
⚡ Your options if you’d rather stick to supervised, wired updates at a service centre.

The digital evolution of vehicles brings incredible convenience — but also hidden traps and new risks. Whether you drive electric or a connected ICE vehicle, this is one episode you can’t afford to skip.

Ready to transition confidently from petrol to electric? Grab my book "Electric Cars: The Truth Revealed" and pre-order my comprehensive training course while it's still available at an introductory price. Subscribe to stay informed about future episodes that will help you navigate the electric revolution with confidence.

To buy a copy of Electric Cars - The Truth Revealed visit grahamhilltraining.com. If you are interested in sponsoring this podcast or would be interested in working together please visit grahamhilltraining.com/contact

Chapters

• 0:00 Introduction and Book Promotion
• 1:25 Evolution of Car Modifications
• 3:22 Tesla OTA Update Insurance Story
• 7:49 How OTA Updates Work
• 9:14 Security Risks and Future Considerations

Transcript

Hi I’m Graham Hill and I’m making a ruckus. I’m the author of Electric Cars – The Truth Revealed which contains all of the information that I’m providing via these podcasts and more. The idea is to get this information out to as many people as we possibly can because we need people to transition from petrol and diesel to electric and that transition is not happening fast enough, mainly as a result of too little information available to provide the level of comfort needed to move from a very comfortable and familiar ICE car to a very confusing electric car.

The purpose of my book and its associated training course is to better inform ICE car drivers of the benefits of electric cars and, if that includes you, to help you to make the move in total confidence. If you would like to buy a copy of the current book please visit grahamhilltraining.com where you can buy the book and pre-order the training that will cost just a few pounds compared to the hundreds that I’ll be charging when we formally launch the new course, hopefully later this year. The book is also being updated so if you buy a copy of the book we’ll send you the new copy completely free of charge. I’ll have a great new section in the new book on finance.

When I was in my late teens and bought my first car, along with all of my mates, we made our cars go faster by fixing sticky stripes down the side of the car. Cunningly called Go Faster Stripes. They didn’t actually go faster but they gave the appearance of being able to go faster. The serious ones amongst us put the occasional squirt of RedEx into the fuel tank and the real crazy ones amongst us fitted twin carburetors which had to be Webers of course. And they would actually make the car go faster. So the car went faster and looked faster but there was something missing. Yep, a straight through exhaust that meant that you could hear the burble of the engine a good mile away.

Ah the good old days. More recently we’ve done away with the stripes and the straight through exhausts due to the fact that there are noise laws preventing them and of course the statutory catalytic converters prevented any chance of anything more than a murmur from the exhaust. More recently, with the help of modern technology we’ve been able to squeeze a few extra horse power out of our standard engine by chipping it. I won’t go into detail but it takes an engineer to connect a computer to the engine control unit (ECU) and adjust things like fuel injection, ignition timing, and boost pressure for turbocharged engines. By adjusting these parameters, chipping can increase horsepower, torque, better known as acceleration and potentially improve fuel efficiency although that’s generally not why you’d have your engine chipped. 

Now in my day, fitting twin carbs was generally not told to your insurance company and if the car was written off, little or no attention was paid to the wreck having twin carbs fitted. But as already mentioned things have changed over the years and if your engine has been chipped you must advise your insurer and pay a higher premium. I’ve seen cases where close inspection of the ECU has revealed some modifications and the insurance payout refused. 

We now enter the world of electric cars that are capable of eye watering acceleration, close to that of a Formula 1 car. So, if speedy acceleration is your thing be prepared to pay the price of the associated insurance premium. But it doesn’t stop there. You probably don’t know the name of Chris Yearsly but a while ago he hit the headlines, I’ll explain why. He had a Tesla model 3 and unusually he’d read his insurance policy which said that if there are any over the air updates to the car he must let the insurance company know about these updates. I should explain what an over the air update is. An electric car over-the-air update, shortened to OTA update, is a wireless software update delivered to a vehicle's computer system by the car manufacturer, similar to how smartphones have their software updated. 

These updates can do all manner of things, improve performance, add new features, fix bugs, and enhance safety without the need to visit a service centre. The reason for the insurer asking for the drivers to advise of these updates is to make them aware of all updates on the car and advise whether the updates could affect the car’s performance. If it does then they’ll decide whether the change in performance requires an increase to your premium.

So Chris receives a notice from Tesla advising of an update on his car. They were very minor things that would have little or no effect on the car’s safety or performance. They had also included Polish with that being the main change allowing the touchscreen controller to include a Polish language option. As requested in his policy Chris called his insurer who happened to be LV= and told them of the update. They said that they were now advised of the updates direct and were aware of this particular update. They then explained that they were going to charge his account with £94 as a result of this update. It wasn’t clear from the report if they were going to charge Chris’s account automatically or as a result of him getting in touch. Chris of course argued with the insurance company explaining that the main change was adding Polish as an option to his touch screen. Which he wouldn’t use anyway. He mentioned a couple of other updates, minor adjustments to the air conditioning and a couple of other items that would have no effect on the car’s performance. 

The LV= agent was having none of it and insisted on charging Chris’s account with the £94. It was at this stage that Chris contacted Which? Consumer magazine, who, in turn, got in touch with LV=. As a result they agreed to pay the money back, which suggests that LV= had already taken the money from Chris and they would pay him a little bit of compensation, which they did. The insurer also said that they would no longer ask customers to let them know about upgrades and updates over the air. But that’s just LV=. You need to check with your insurer as to what they’re rules are regarding over the air updates before taking out your policy. I would also add that many ICE cars are capable of receiving OTA updates to their control systems. So even if you are still driving an ICE car you should also check this out with the manufacturer to see if they operate OTA updates and what, if anything, you must advise your insurer. 

There was a further twist as explained by Which. Whilst they seemed to have assurances from LV= that they no longer needed to be advised by drivers of any OTA updates, that didn’t mean that no insurer required to be notified. This requirement could still be in other insurers’ policy conditions. And if you don’t tell them about the upgrades over the air there’s a very good chance that if you have an accident they won’t pay out on your insurance claims as you haven’t met the terms of your policy. So if it’s a requirement within the policy, make sure that you advise your insurer of any updates, even if they don’t affect the car’s performance. Obviously, if you take an after fit performance pack upgrade you must advise your insurer and expect an increase in your premium. And maybe a drop in premium if new safety features are introduced. I wouldn’t hold my breath on that one!

Now that addresses the need to ensure that you meet the terms and conditions of your insurer when it comes ensuring that you are covered at all times but a follow on question is frequently, how do over-the-air updates work and are there other dangers to be aware of other than those explained? Also, how do the updates get to the car? Via the internet, your phone or some other way of connecting over the air. Well, as mentioned earlier the connection is similar to the updates that take place on your phone although that mainly happens when you’re at home connected to your Wi-Fi. And that isn’t the way the updates reach your car.

A device management system operated by the car manufacturer issues the software update. The update is uploaded to the internet using cloud services and is sent to your car using 4G and 5G data masts. Your car downloads the updates and returns diagnostic information. 

That all sounds great but it could be vulnerable to hackers. An experiment carried out in America showed how, with the use of a laptop, a Mitsubishi Shogun was literally taken over. They could operate everything from the windscreen washers to the brakes and steering and the entertainment system increasing the volume and changing stations. This has opened up discussions amongst Insurers as to how to prove that a car’s operating system has been hacked, resulting in an accident and not the driver being at fault.

Not only could the operating systems be hacked but could open to malware, viruses, ransomware, spyware, phishing attacks, and other online threats. Especially worrying when one sees the future plans for connected cars. Auto payments of road charges such as parking costs, tolls, congestion and emission charges etc. Even speeding fines at the touch of a button could be paid. But surely if we can protect our computers against these sorts of attack we should be able to protect any software held within our cars. If they aren’t working on it already then the likes of Norton and McAfee should be resolving this problem.

I’ll produce a podcast on data vulnerability at a later date but if this concerns you, you can avoid OTA updates by not agreeing to the terms and conditions which must be agreed to before the in-car OTA systems are activated. Most manufacturers will allow you to take your car to a main dealer or service centre for the update to be carried out under supervised conditions using a wired connection at your next service, or, if the update is critical, allow you to call into the dealer to have the update carried out under supervised conditions.   

 In the meantime I’ll be keeping an eye on developments in the area of OTA updates and any insurance implications. 

That’s the end of this short but important insurance podcast. I hope that you found it interesting and you’re now alerted to something else that you really need to check out when you insure your car. To make sure that you’re alerted to all of my podcasts in future either subscribe on this channel or go to grahamhilltraining.com/podcast and sign in. And don’t forget to buy my book and course by going to grahamhilltraining.com. Keep making a ruckus, I’ve been Graham Hill, catch you on the next insurance podcast.