What is Electric Vehicle Insurance?
The trend towards Electric Vehicles (EVs) is clear and obvious. Singapore intends to phase out all internal combustion engine (ICE) car sales by 2040. While EVs still make up less than 1% of the total vehicle population in Singapore (as of 2022), this figure is set to grow exponentially in the coming years. In 2022 alone, they made up 10% of all new car sales! The top selling EV brands being Tesla, Polestar, Mercedes and BMW. Despite currently being a nascent market, projections slate EVs to become the industry standard globally before the middle of this century.
EV has a cleaner impact on the environment as it does not produce tailpipe emissions. There is no engine. In place of that, it is powered by a battery. They also do not require gas stations, and can be charged at home, or a shopping mall when parked.
Beyond that, the driving functions, and risk associated with an EV, is not that dissimilar to a normal Private Car. This is also the same for according insurance coverage as a mode of transport.
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What does Electric Vehicle Insurance cover?
EV car insurance offers similar coverage as private car policies with 3 types of coverages, Comprehensive, Third Party Fire and Theft, Third Party Only. Depending on the coverage you opted for, a comprehensive policy will cover accidental damages or contact with any falling objects, stolen, vandalised, catches fire and even damages such as flood or lightning.
Do note that the Electric Vehicle autonomous function has yet to be approved by the Land Transport Authority as of 2022, hence such functions are commonly excluded by insurers in Singapore. Electrical breakdown, such as in the case of a manufacturer fault, is also generally not covered.
Third Party Only (TPO)
A Third Party Only policy offers the least coverage and is also the cheapest option. It offers you protection in situations where you are held responsible for an accident, either third party property damages or third-party bodily injuries. These third-party liabilities include damages to any property involved during the accident – including vehicles, trees, or even lamp posts, as well as medical/ hospitalisation expenses or other injuries sustained during the accident by the victim. This includes loss of wages and loss of use.
Third Party, Fire and Theft (TPFT)
This provides slightly more coverage as compared to TPO policies. Besides the third-party liabilities mentioned under TPO coverage, it covers your vehicle for events such as Fire or Theft. If you are a frequent driver who drives outside of Singapore, it is strongly advised that you purchase a Third Party, Fire and Theft cover as theft frequencies are higher.
This is the most superior form of coverage as well as the most common. It not only covers the areas mentioned under TPO and TPFT policies, but also offers protection to the car itself. Coverage includes damages to the car body, windscreen and convertible soft top cover. Besides the policy excess, which the driver must bear, a comprehensive policy will pay no more than the vehicle’s market value of the damages at the time of loss or of damage.
If the car is under financing, like on a bank loan, the bank will usually enforce that comprehensive insurance is purchased for the vehicle. This is because said bank needs to protect their assets: the car, which they legally have ownership over until the loan is fully paid. The high cost of cars in Singapore means that a large proportion of cars are on bank loans, making comprehensive policies the most common form of car insurance in Singapore.
Is Electric Vehicle Insurance expensive?
The EV market makes up under 1% (as of 2022) of all vehicles locally. While the principles for covering EV vehicles are similar to vehicles with combustion engines, there are some differences.
Battery (Engine) replacement:
Batteries of most Electric Vehicles (EVs) are not modular. If you damage a part of the battery, it is the equivalent of changing the entire engine of an internal combustion car.
Being new technology, the diagnostic tools required for EVs are not commonly available to workshops yet, thus options for repair are limited and majority of the repairs are done only by authorised dealers. This comes at a cost which is significantly higher.
As EV technology is new, there is insufficient data for insurers to price more aggressively. Many insurance providers are taking a wait-and-see approach.
Fortunately, there is a light on the horizon as more and more insurers are starting to provide offerings for EV, and we are gradually seeing more competitive premiums.
Contact us for policy quotation,
comparison and unbiased advice now!