Short answer? Yes, having an Electric Vehicle affects your car insurance policy. Long answer? Here are the details.
Electric Vehicles are quickly gaining traction in Singapore, with the number of electric vehicles here more than doubling in 2021. This upward trend is predicted to continue under the Singapore Green Plan 2030 as the government continues heavily advocating and incentivising increased EV usage.
With seemingly everyone making the switch over to EVs, the burning question on everyone’s mind is how your current car insurance policy will be affected by the purchase of a new electric car. What are the differences between insurance policies for electric and non-electric cars, and how will your new vehicle be protected?
To this end, here are 3 essential points you need to know about electric car insurance in Singapore.
EV Motor Insurance is relatively rare and expensive
Compared to insurance policies geared towards petrol or diesel-fuelled cars, EV insurance policies can be relatively rare. Currently, only a handful of car insurance policies in Singapore are designed to cover EVs, limiting your choices.
EV insurance policies are more costly than your current policy. Most electric car models are more likely to be in the luxury category than traditional internal combustible engine vehicles, making them costlier to insure.
Electric vehicle parts are also more expensive and less manufactured than their non-electric counterparts, meaning each individual car part costs more to repair and maintain.
This is mainly due to the fact that EVs are more expensive than non-electric cars, which means that their individual car parts also cost more to repair and maintain. Electric cars cars also run on large, expensive batteries that are costly to fix when broken.
All of this results in more expensive maintenance and protection costs, reflected in the insurance premiums you pay.
EV motor insurance policies are more personalised
Typically, car insurance premiums are calculated based on various factors such as your age and your driving experience.
EV insurance policies go a step further and take additional aspects such as the make and model of your car into consideration when calculating your premium and designing your insurance policy.
The downside to this is that it can be hard to receive a direct online quotation for your EV insurance policy. Unlike the usual car insurer who will likely provide you with an instant estimation of your premiums following a few clicks around their website, EV car insurers can take up to a few working days to tailor an accurate quotation to your needs.
However, this also means that your car insurance policy will be much more customised to your unique profile and needs, since you provide the insurer with more specific details about yourself and your vehicle.
You can pay-per-kilometre with your EV motor insurance
Compared to the annual model currently used for internal combustion engine cars, electric car owners can now opt for usage-based insurance that allows them to pay according to how much they drive.
For petrol or diesel-fuelled cars, car insurance in Singapore generally requires customers to pay a fixed sum upfront. Still, some EV car insurers have begun offering customers a post-paid pay-per-kilometre option, also known as Usage-Based Insurance (UBI).
Under this option, customers have to pay a fixed S$150 coverage fee annually. The specific monthly premium payment will subsequently be calculated based on the distance travelled by the customer each month. Customers can thus be sure that they’re not paying extra for coverage or maintenance services that they will never use.
Innovative insurance options are coming our way
The strength of EV insurance policies lies in their capacity for personalisation, but hearing that these policies are currently rare and expensive might be a bit of a bummer.
But fret not – emerging innovations in the auto insurance industry suggest that the future is bright.
Tesla, undoubtedly the largest electric car manufacturer at the moment, has begun offering its own insurance option for customers who purchase their EVs.
Tesla’s car insurance is unique in that it incorporates technology to optimise and lower the costs of EV insurance. They monitor customers' daily driving behaviour in real-time to estimate their level of driving safety, which predicts the likelihood of them requiring maintenance or repair in the near future. Their monthly premiums are then calculated based on these safety predictions.
With recent trends showing that these safety predictions have been largely accurate in estimating customers’ driving behaviour, this is a great way to optimise the price of their insurance premiums by ensuring that customers are not required to pay too much in excess.
Tesla’s in-car technology is also precise in identifying factors like accident causes, which further minimises costs by processing claims much faster and easier.
Although this insurance option is currently only available to American Tesla customers, other insurers may follow suit by pursuing similar innovations, significantly reducing the price of EV motor insurance across the board.
Choose the best EV motor insurance plan
The Singaporean government has been steadily increasing the number of charging stations across the island to make every HDB town EV-ready by 2025, which means that owning an electric car will become much more convenient than it currently is. EVs are also known for being the greener option, so making this switch could be a great way for you to reduce our carbon emissions.
This means that now might be an excellent time for Singaporeans to switch to an electric car.
Be sure to choose the best electric car insurance for your vehicle when you make the switch so that you’re adequately prepared for any situation that you might face in the future.
This article was first published in ValueChampion.