Why Insurance for Electric Vehicles are Expensive
EVs are relatively new in the Philippines and insurance companies are still studying the risks associated with insuring these high-tech vehicles. Below are the major factors that affect EV insurance pricing, as well as tips about the available comprehensive car insurance in the country.
Reasons why it is expensive to Insure Electric Vehicles (EVs)
Insurance for electric vehicles (EVs) is generally more expensive than for traditional gasoline-powered cars due to several factors:
1. Higher Repair Costs
EVs often require specialized parts and trained technicians, which makes repairs more expensive. Battery replacement, in particular, can be costly.
2. Limited Repair Network
Not all repair shops are equipped to handle EV repairs, which means insurers may have to send vehicles to specialized facilities, which in turn, would increasing costs.
3. More Expensive Parts
EV-specific components, such as sensors, electric motors, and charging systems, can be costlier than their gasoline counterparts. More often than not, EVs are equipped with gadgets with advanced technology, which are also costly to replace
4. Higher Purchase Price
Even for traditional vehicles, insurance premiums are partly based on a vehicle’s value. Since EVs are generally more expensive, it is one of the reasons of high insurance premiums.
5. Higher Risk of Total Loss
In some cases, even minor battery damage may lead insurers to declare an EV a total loss because of the high replacement cost and safety concerns.
6. Expensive Battery Replacement
The battery is the most valuable component of an EV, and if it's damaged in an accident, the replacement cost can be significant.
7. Limited Claims Data
As EVs are still relatively new compared to gasoline cars, insurers have less historical data to accurately assess risks, resulting underwriters to resort to higher pricing.
Things to know about insurance for your EV this 2025
Check the provisions on Deductibles
Deductibles are The amount of money that the insured person must pay before their insurance policy starts paying for covered expenses.
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General Policy Deductibles
Some insurers accept EVs but have often higher deductible that causes the insured's participation per accident higher, compared to insurance for traditional IC vehicles
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Deductibles on battery-related claims
Replacing batteries caused by accidental damage are covered. However, clarify with the insurance company how much is your participation for battery replacement cases
Other Conditions and Subjectivities
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Vehicles with self-driving capabilities
Some EVs have auto-pilot features like Tesla's FSV. Have your insurance agent or broker explain if accidents caused by autonomous driving are covered
