An Expert's Guide on Electric Car Insurance in Singapore

As the world continues to grapple with environmental issues like global warming, measures are taken in many countries to reduce their carbon footprint as stipulated in the Paris Agreement. Here in Singapore, car owners are encouraged to adopt electric vehicles (EVs) as a more sustainable way to travel besides taking public transportation. Government incentives like the EV Early Adoption Incentive (EEAI) and Vehicular Emissions Scheme (VES) have even been rolled out to subsidise the cost of owning and maintaining electric vehicles. In fact, the Singapore government hopes to phase out internal combustion engine vehicles entirely by 2040.

That being said, there are several key differences between the two kinds of vehicles that you need to be aware of, including the stark distinctions in car insurance. Indeed, insuring an electric car differs significantly from traditional comprehensive motor insurance policies. This can be attributed to the way these vehicles are made. EVs, for instance, feature specialised components such as high-capacity batteries and advanced software, and as a result, the cost of repairs and maintenance can be higher. This directly affects the structure and pricing of electric car insurance policies. For prospective EV owners, understanding these differences is essential for making informed decisions and ensuring that your EV receives comprehensive protection.

In this guide, we will delve deep into the nuances of motor insurance in Singapore for EVs. From understanding different coverage options to exploring cost-saving strategies, this article aims to equip EV owners with the knowledge needed to safeguard their vehicles whilst navigating the vast variety of insurance plans in the market today.

1. Why Electric Car Insurance is Different
 

As mentioned, electric car insurance can differ quite significantly from regular car insurance. This is down to several assessment points that can be categorised into—risks, repair requirements, and other associated costs. These distinctions can influence insurance premiums, coverage options, and claims processes.

1.1. Premium Costs

Electric car insurance premiums tend to be higher than those for petrol or diesel vehicles. There are several reasons for this:

• Expensive components: EV batteries, which account for a significant portion of a vehicle's value, are often costly to repair or replace. This factor increases the overall risk for insurers.
• Advanced technology: EVs rely on cutting-edge systems, such as regenerative braking and autonomous features, which require specialised repairs and diagnostic tools.
• Higher purchase prices: The higher upfront cost of EVs translates to higher insurance premiums compared to similarly sized internal combustion engine vehicles.

Despite these higher upfront costs, EV owners may enjoy savings over time due to lower fuel and maintenance costs, which help offset the cost of car insurance for EVs.

1.2. Repair and Maintenance Costs

Repairs for EVs are also vastly different compared to those of conventional vehicles due to their unique build and functionality. Some common factors that affect repair costs include:

• Battery repairs: Damaged batteries require specialised repair services by a trained professional. These batteries are also quite expensive and can cost several thousand dollars to replace.
• Limited repair expertise: EVs often require servicing by trained technicians at authorised service centres, which is a key factor in higher labour costs.
• Software reliance: With many EV components operating through delicate and complex integrated software, even minor faults may require updates or recalibrations.

Given these challenges and increased costs, it is highly recommended for EV owners to get comprehensive car insurance plans that account for such specialised repairs, as these repairs are not uncommon and without sufficient coverage, expenses can accumulate very quickly.

2. Types of Coverage for Electric Vehicles

When it comes to car insurance for electric vehicles, it is important to select the right type of policy. This is, of course, subjective; with numerous policies available to choose from, you will need to carefully scrutinise each type of coverage and base it on your own requirements. What level of protection do you actually need? What is your budget? These are just some of the considerations you need to take into account.

2.1. Comprehensive Insurance

Typically speaking, the most comprehensive electric car insurance policies will cover the following scenarios:

• Accidental damage to your vehicle
• Fire, theft, and vandalism
• Third-party liabilities for damages or injuries caused to others

This particular electric car insurance plan is highly sought after by EV owners due to the fact that they are shielded from the brunt of the expenses attributed to repairing or replacing electric cars. Many insurers also offer EV-specific perks, such as coverage for charging cables, portable chargers, or roadside assistance.

2.2. Third-Party Insurance

On the other end of the spectrum, the bare minimum electric car insurance you need to get as stipulated by legal requirements is third-party insurance. This policy covers:

• Damage to another person’s property
• Injuries sustained by third parties

Despite its low premium, third-party electric car insurance does not actually protect your EV; as its namesake suggests, it is a penny-wise, pound-foolish policy that only offers protection against incidents involving third parties. Consequently, you will still have to fork out the entire cost of repairs and replacements, which, as covered earlier, can be very expensive. More often than not, third-party electric car insurance plans are taken up in addition to existing policies as an add-on.

2.3. Add-Ons for Electric Vehicles

Customised add-ons are essential for tailoring your insurance based on your EV’s specific needs. Some popular options include:

• Battery replacement coverage: Offers protection against the high cost of replacing damaged or degraded batteries.
• Portable charger protection: Covers theft or damage to home or portable EV chargers.
• Roadside charging assistance: Provides emergency support if your EV battery runs out of charge mid-journey.

These add-ons are designed to enhance your existing electric car insurance to a more rounded plan. The fact that they are add-ons also allows you to only select the ones you really need, reducing your premiums.

3. Key Considerations for Insuring an Electric Car in Singapore

Source: Singlife

When it comes to selecting the right motor insurance in Singapore for your EV, local factors also play an important role in shaping the cost and suitability of policies.

3.1. Government Incentives

As an advocate of sustainability and environmentally-friendly measures, the Singapore government offers EV owners generous initiatives and rebates to encourage more Singaporeans to make the switch. This includes the Electric Vehicle Early Adoption Incentive (EEAI), which provides rebates of up to $20,000 for buyers of fully electric cars. There is also the Vehicular Emissions Scheme (VES), which rewards buyers of cleaner vehicles that meet certain emission thresholds with rebates, making EV ownership more accessible and affordable in a country that is already notorious for steep car ownership costs.

These incentives indirectly affect electric car insurance costs by lowering the upfront purchase price, which may in turn reduce premiums. Additionally, as more Singaporeans are enticed by government policies promoting EV adoption, insurers are also prompted to keep up and put together competitive electric car insurance packages for EV owners.

3.2. Charging Infrastructure and Road Tax

The availability of charging stations across Singapore affects both the convenience and risks of EV ownership. Here are some key considerations to take note of:

• Charging station risks: Public charging points may expose EVs to risks like theft or vandalism, which should be covered by your electric car insurance policy.
• Home charging systems: If you have a home charger installed, do ensure that it is also adequately covered as part of your comprehensive car insurance.

On top of all that, you will be pleased to know that Singapore’s lower road taxes for EVs can also help offset higher insurance premiums, making EVs a cost-effective choice in the long run.

4. How to Lower Electric Car Insurance Premiums
 

Despite the relatively high costs of electric car insurance premiums, there are ways to lower them whilst still maintaining excellent EV coverage. Here are some useful tips you might want to consider.

4.1. No-Claim Discount (NCD)

Building up a No-Claim Discount (NCD) through safe driving is one of the most effective ways to reduce premiums. In Singapore, an NCD can lower your premium by up to 50%, significantly benefiting long-term EV owners. Additionally, if you manage to maintain a clean driving record for three consecutive years, you will be able to enjoy further discounts on top of your NCD when you renew your insurance policies with participating insurers.

4.2. Bundle Your Policies

Bundling is one of the most effective marketing tools in any industry, encouraging customers to make bulk purchases at attractive prices. The same principles are also at play when it comes to insurance policies, as insurers often provide discounts for customers who bundle multiple policies, such as home, life, and car insurance. Similarly, bundling your EV insurance with other policies can lead to substantial savings.

4.3. Opt for Usage-Based Insurance

Some providers offer usage-based electric car insurance, where premiums are calculated based on driving behaviour and mileage. For EV owners who drive less frequently, this can prove to be a cost-effective, flexible alternative.

4.4. Increase Your Excess

One effective way to lower electric car insurance premiums in Singapore is by increasing your excess—the amount you agree to pay out-of-pocket before your insurer covers the rest of a claim. A higher excess reduces the insurer’s risk, leading to lower monthly or annual premiums. However, it is important to choose an excess amount that remains affordable in case of an accident. Comparing different insurance providers can also help you find the best balance between excess and coverage.
 

5. Comparison of Electric Car Insurance Providers in Singapore
 

Choosing the right insurance provider is just as important as selecting the right electric car insurance policy. A reputable insurer is better positioned to offer competitive premiums and better equipped to manage your policies effectively. Here are some factors to consider when picking your insurer:

5.1. Premium and Coverage Comparisons

Different providers offer varying rates and benefits. These are the main coverage points to pay attention to:

• Premiums for comprehensive coverage
• Limits for battery or component repairs
• EV-specific perks such as free charging or servicing discounts

5.2. EV-Specific Features

As EV ownership becomes more common, some insurers have also introduced features designed specifically for EV owners, such as:

• Battery replacement protection
• Free roadside charging assistance
• Green incentives, such as discounts for eco-conscious practices

Taking the time to thoroughly review and compare electric car insurance policies will give you a better chance of scoring a value-for-money plan with excellent coverage. That being said, not everyone has the capacity to undertake what is often a time-consuming task. If you prefer seeking expert help, check out Singapore insurance brokers like Eazy Insurance. Our team will help you simplify complex policies and compare them to select the most suitable plan for you.

6. The Future of Electric Car Insurance in Singapore

Along with a growing number of EV owners, electric car insurance policies look poised to evolve to meet changing needs. Here are some key trends to look out for:

• Customised EV policies: Insurers are likely to offer more tailored policies for EVs, addressing unique risks like battery degradation or charging-related incidents.
• Usage-based insurance: Policies that use telematics to assess driving habits may become  more common, offering greater personalisation in terms of premiums.
• Increased competition: As more insurers enter the EV market, drivers can also expect better rates, enhanced benefits, and more flexible plans.

Conclusion

Although electric vehicles are still considered fairly recent, the market is rapidly growing with EV brands all over the world vying for a share in a multi-billion dollar industry. Given how insurance is an indispensable part of car ownership, it is necessary for EV owners to have a good understanding of the nuances of EV insurance policies. By paying attention to the little details, evaluating and comparing EV-specific options, and adopting cost-saving strategies, owners will be able to secure the best protection for their electric vehicles.

Whether you are a new EV owner or considering making the switch, it is always reassuring to know that there is someone in your corner when picking out the right electric car insurance plan. This is where eazy Insurance can support you. As a Singapore insurance broker, we act as your liaison when communicating with insurance providers, negotiating fairer and better terms for you. We will also walk you through every step of the process, from dissecting complicated policy terms to putting the best car insurance plan together. 

To learn more about how we can assist you, please contact us today.