High repair costs contribute to pricey EV insurance premiums: Priceza
The low number of electric cars on the road, high repair costs, lack of repair awareness, and the lack of components are responsible for the increased price of insurance for electric cars, according to car insurance price comparison website Priceza Money.
Despite an exponential growth in electric car demand, complaints about after-sales services and the cost of insurance were becoming frequent, Priceza Money’s head, Siravit Chayavanich, said on Wednesday.
“For instance, a Thai motorist recently faced a 1.1 million baht repair bill after hitting a traffic island and damaging the battery,” he explained.
However, he said the after-sales service complaints were only impacting a few electric car companies and the increase in insurance premiums was by far the biggest concern amongst EV owners.
Four factors contribute to EV insurance costing significantly more than for vehicles with a combustion engine.
First, the low number of electric cars on the road means insurance companies are unsure about repair costs and thus set higher premiums.
“As there is little data about electric car usage data and damage statistics, the insurance company hedges its bets by changing 20% more than for a gasoline one,” Siravit said, citing an insurance company’s meeting report.
Secondly, most electric car insurance policies insist on repair at specialised centres, thus doing away with the possibility of taking the EV to a local garage.
In addition, EV makers have failed to disseminate knowledge on EV repair resulting in a focus on the more expensive component replacement.
Finally, an electric car has only six to seven components compared to the hundreds in an average gasoline car.
Siravit expects the price of electric car insurance to drop by 20% next year and decrease further in 2025 as the government's electric vehicle (EV) promotion measure, which stipulates that manufacturers must produce EVs in Thailand at the same rate as imported ones, takes effect.
“The construction of EV factories in Thailand will make the price of components cheaper,” he said, adding that the country will also gain repair knowledge from EV manufacturers as well.
He also expects the price of EV insurance to be equal to gasoline cars in 2025.
Emergence of personalised car insurance
Siravit predicts that personalised car insurance will play an important role in the industry in the future. This allows motorists to benefit from cheaper premiums based on driving behaviour or to select coverage for some components instead of the whole car, according to Siravit.
He said this type of insurance is now available in many countries, adding that the Office of Insurance Commission has launched guidelines on personalised insurance to lower the prices.