“Annual suffering” and price exaggerations in insurance policies

Vehicle owners complained about what they described as overpricing in the cost of insurance policies for electric vehicles, compared to insurance prices for traditional vehicles, considering it one of the most prominent challenges facing the owners of these vehicles on an annual basis when renewing their ownership.

They presented to “Emirates Today” their experiences in the journey of searching for insurance at a reasonable price for their electric vehicles, pointing out that the price of the policy in some of them reached 7,500 dirhams, which made electric car insurance an “annual suffering” that is renewed when the procedures for renewing vehicle ownership are completed.

In turn, officials in the automotive sector said that insurance companies determine the cost of the policy on electric cars, according to the percentage of potential risks incurred when exposed to any accident.

They explained that some accidents affect the “battery” of the electric car, which in turn represents a high value out of the total value of the car, in addition to the fact that this type of car needs qualified maintenance experts and specific garages to carry out maintenance and repair, and thus its cost is high compared to the traditional one that can be repaired in all garages. They also pointed out the lack of agencies for some electric vehicles in the local market in the previous period, which made importing spare parts from foreign markets expensive, and they expected that the nature of this problem would gradually decline, in light of The growing introduction of electric cars, their spread in the markets at greater rates, and the availability of more agencies for them.

Annual suffering

In detail, consumer Alaa Kamal said: “I was surprised by a large exaggeration in the cost of insurance for my electric car of European origin, as the price of the policy amounted to about 6,000 dirhams.”

Kamal pointed out that many companies refuse to insure electric cars, considering this one of the most prominent challenges facing owners of this type of car.

For his part, consumer Muhammad Youssef said: “I was surprised when I learned that the price of the insurance policy for my American-made electric car reached 7,500 dirhams, with the price of the policy increasing compared to the past two years,” stressing that “insurance for electric cars has become an annual suffering that is renewed when the procedures for renewing vehicle ownership are completed.”

In the same context, consumer Samir Mahmoud presented his experience, saying: An insurance company asked him for 6,500 dirhams in exchange for insurance for his electric car of Asian origin, even though the car model dates back to 2021.

He added: “I inquired from the company about the reason for the high price and reliability of insurance, and the answer was that the car does not have an agency in the local markets, and therefore the cost of repairing it will be high if it is exposed to any accident and is forced to import spare parts from abroad.”

For his part, consumer Bassem Yahya confirmed that the cost of insurance and the significantly and exaggeratedly high prices of electric car documents, compared to traditional cars, are among the most prominent challenges of owning this type of car, pointing out that several companies refuse or procrastinate in insuring them under the pretext that the cost of repairing them is high.

Repair standards

In addition, Mamdouh Khairallah, an automotive sector expert and General Manager of Rolls-Royce Motor Cars, the mechanical center of the Arabian Gulf in Dubai and the northern regions, said, “Repair standards are what determine the high cost of insuring a number of electric cars with insurance companies, compared to traditional cars.”

He explained: “Electric vehicles need expert technicians, and only some technically qualified garages are engaged in maintenance and repair of this type of vehicle.”

He added: “The value of the insurance policy for some cars is determined according to the history of their repairs and their cost during accidents. The most prominent example of these is one of the famous brands of American-made cars, which requires a high cost when it is exposed to an accident, and thus insurance companies resort to setting a high price for insurance on it, in a way that exceeds all other electric vehicles, and the insurance fees for each of them vary according to the insurance companies’ estimates of losses, repair standards during accidents, and the availability of spare parts.”

Car battery

For his part, automotive sector expert and General Manager of the Porsche Auto Center Abu Dhabi, Wissam Khalil, said, “The high cost of insurance for electric cars is due to the specificity of these cars compared to their traditional counterparts, as some accidents may affect the batteries, which in turn represent a high value of the total value of the car. In addition, they require qualified maintenance experts and specific garages to carry out maintenance and repairs from accidents, and thus their cost is high compared to traditional ones that can be repaired in all garages.”

He added: “Some electric cars are known for their high insurance value as a result of their high cost during repairs from accidents. In addition, some other electric cars of Asian origin may not have local agencies available for them, and thus importing spare parts for them from foreign markets takes longer and is more expensive.”

High cost

In the same context, a sales consultant at one of the car agencies, Mohamed Alaa, said: “The high cost of insuring electric cars, especially one of the famous brands of American origin, is due mainly to the possibility of the high cost of dealing with accidents in these cars, and the cost and availability of spare parts for them compared to traditional cars, especially with the different nature of the work of each of them, and the reliance of (electric) cars on systems and batteries of a special nature that make them more expensive when exposed to damage, while garages can provide traditional car spare parts quickly. And at a lower cost.

Alaa expected that the nature of this problem would gradually decline, in light of the growing introduction of electric cars, their spread in the markets at greater rates, and the availability of more agencies for them, in a way that supports the possibility of a decline in the cost of insurance for them, especially for Asian brands whose agencies have begun to spread widely in the local markets recently. Alaa pointed out that “insurance companies determine the value of electric cars according to the ratio of the potential risks to the costs when exposed to any accident, and according to previous market experiences according to which the cost of insurance is evaluated.”