Many electric vehicle (EV) owners are opting for third-party insurance, which is cheaper than comprehensive insurance, to avoid higher premiums.
Insurance executives and auto technicians told the newspaper Al Khaleej that the average annual insurance price for electric cars ranges between AED3,500 ($953) and AED8,000, 20% to 35% higher than fossil-fuel cars of the same market value.
The reason for the higher premium lies in the high cost of batteries and electric motors, the scarcity of spare parts, and the long downtime in specialised workshops.
According to motor technicians, EVs face significant challenges related to repair costs, particularly malfunctions in the vehicle's control computer and the complete body design, which increases the cost of replacing parts compared to fossil-fuel cars, whose external body is divided into several sections.
Mr Ezzat Alaghawani, executive manager of motor claims at Sukoon Insurance, said, “EV repair costs are high, due to the high cost of their components and spare parts (especially the battery and electric motor), in addition to the fact that any accident may affect delicate electrical systems, and any minor impact to the battery may result in the vehicle being written off. As for coverage, insurance companies usually provide the same basic terms and comprehensive coverage with some exceptions.”
He explained that the battery represents 30%-40% of the car’s value. Replacing the battery may exceed AED60,000-80,000 per car, and only a limited number of workshops or agencies are capable of repairing electric cars, which increases the cost of repair and the duration of downtime.
He pointed out that many insurance companies add clauses specific to batteries and electrical components; To ensure clarity of coverage, such as coverage against total or partial damage resulting from an accident, excluding damage due to improper charging or the use of an unauthorised charger, in addition to additional coverage items for some high-cost components such as the electric motor or software systems.
He said that some insurers have recently begun adding emergency assistance services for electric cars, such as mobile charging in the event of a dead battery on the road.
He added, "Because electric cars are relatively new to the market, insurance companies impose an additional premium due to the lack of long-term data on accident rates, in addition to the limited availability of used parts. Furthermore, the high speed and torque of electric cars can increase the likelihood of serious accidents, especially given their light weight."