Insurance companies warned of higher risks in covering electric vehicles

During a meeting with members of Thai General Insurance Association, OIC assistant secretary-general Apakorn Panlerd urged insurers to employ risk management strategy in handling EV cases as EVs operate differently from internal combustion engine (ICE) vehicles and therefore carry higher risks.

Apakorn said insurers must carefully consider all related details before providing the insurance, as well as set a suitable premium rate that reflects the true risk of the product. He said companies should also keep in mind that EVs use different parts than ICE vehicles, and certain parts may not be readily available in the market.

The OIC also urged insurers to prepare their supporting system for EV insurance claims, including the IT and vehicle inspection departments, for efficient handling of EV cases.

Apakorn also told insurance companies to refer to the official document titled “Policy for Insurance of Battery Electric Vehicles” when designing formats, terms, and premium rates of EVs. The document has been prepared by the OIC and the association.

Apakorn told reporters that the meeting on Thursday aimed to establish a standard by which insurance companies design and handle the insurance of electric vehicles amid public concerns about safety issues.

He pointed out that besides the massive recall in the US, the sales of EVs in South Korea recently went down for the first time in six years after news of battery combustion. Safety concerns, along with inadequate charging stations and the higher prices than fossil-fuel vehicles, are some of the reasons that prevent customers from buying an EV, he said.

He added that the OIC might consider making the submission of a risk management plan mandatory for any insurance company to offer EV insurance, if the office finds that insurers are disregarding safety measures or running a risky operation.