Insurance provider in Thailand to hike premium rates for EVs – spare parts up to 60% more expensive

Over in Thailand, Tokio Marine Safety Insurance said that it has halted its current insurance premiums for new EV customers, including those who own transferred cars, and would now consider new premium rates on a case-by-case basis. The changes in its electric vehicle (EV) insurance policy came into effect on July 1, the Bangkok Post reports.

The auto insurance provider said it would continue to provide insurance for EVs, but said the move to revise its rates was influenced by the fluctuating market prices of new and used EVs, which it said impacts the insurance value. The company added that existing customers who want to renew policies would continue to receive standard coverage, but it would now base renewal premium rates on claim records.

Wide fluctuations in EV prices and high claim values have reportedly led insurers to rethink how to offer coverage. According to local media reports, the Thai General Insurance Association recently cautioned its members about EVs.

It noted that spare parts in some cases were 50-60% more expensive than for combustion-engine cars, and many damage claims were for 90-100% of a car’s value. Experience in many countries has shown that even minor collision damage to an EV’s battery pack can result in the entire unit needing to be replaced. The battery pack typically accounts for about half the cost of an electric vehicle.

The association’s president, Suwat Supakarndechakul, said two insurers had reportedly decided to discontinue offering policies for EVs. “We are monitoring the situation to find out what happened with the two insurance companies,” he said, without naming the two firms.

He added that the TAIA planned to meet with global EV makers, who are also association members, as well as the Thai General Insurance Association (TGIA) to look into the issue. TGIA president Somporn Suebthawilkul said the association is asking its members to present their methods for calculating EV insurance premiums.

Federation of Thai Industries vice-chairman Surapong Paisitpatanapong said it remains unclear whether two insurers want to stop offering EV coverage. “We don’t know whether this stemmed from problems regarding paying compensation to customers,” he said.

Meanwhile, a source at the Office of the Insurance Commission (OIC) said no insurers have officially announced the cancellation of their EV insurance services. The regulator said that a total of 23 insurance companies still provide EV insurance in the country.

“As for the Tokio Marine case, there may have been a misunderstanding about the cancellation of its EV insurance service. Recently the company clarified it is adjusting the conditions for existing customers and is not only accepting transfers of black-plate cars,” the OIC source told the news publication.

A price war among manufacturers, mostly Chinese ones, is further complicating the issue for car owners as well as insurers, the report adds. For example, an insurer that assesses the replacement value of a car at, say, one million baht and prices the premium accordingly might find the same model being priced new at 750,000 baht a few months later, and so would have to acknowledge the higher sum if the vehicle was in a serious accident.

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