Welcome to Insurance League, a platform that presents various information about risk management and the world of insurance, directly from the perspective of practitioners. On this occasion, we raise an interesting topic about the strategic role of insurance broker in protecting motor vehicles, especially electric vehicles (EVs) which are becoming a future trend.
This article will explore how brokers can help you understand hidden risks such as battery capacity degradation and provide targeted protection solutions.
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Transition to Electric Cars and Hidden Risks
In recent years, electric vehicles (EVs) have become increasingly popular in Indonesia. Supported by government incentives and public awareness of the environment, sales of electric cars have experienced significant growth. However, behind the various advantages of this technology, new challenges arise in terms of risk protection – especially regarding the most expensive component: the battery.
Unfortunately, most EV owners are not yet aware that EV insurance does not automatically cover all potential damages, including the risk of decreasing battery capacity. This is where the important role of EV insurance becomes crucial. However, choosing the right policy is not as easy as buying conventional vehicle insurance.
In this article, we will take a deep dive into the key challenges in EV insurance – particularly regarding batteries – and why using an electric car insurance broker can be a strategic decision for optimal protection.
Risk of Electric Vehicle Battery Capacity Decrease
The battery is the most vital and most expensive component in an electric vehicle. Over time and usage, the capacity of an electric car battery can naturally decrease. This decrease causes reduced range, weakened performance, and the vehicle’s resale value to drop drastically. This is a unique risk that is not yet widely recognized by electric vehicle (EV) owners in Indonesia.
Although most manufacturers provide a battery warranty of up to 8 years or 160,000 km, the warranty usually only covers extreme degradation (below 70–75% capacity) and does not cover normal degradation. In practice, battery warranty claims are not always easy and often require a long and rigorous verification process from the OEM.
The problem is, standard electric vehicle insurance policies in Indonesia currently generally do not explicitly cover the risk of battery capacity degradation. Even in all-risk policies, the focus of protection is more on damage due to collisions, fires, or theft—rather than internal degradation that occurs naturally.
This creates a significant protection gap. EV owners are at risk of having to bear the cost of replacing the battery themselves, which can reach hundreds of millions of rupiah. This is where the need for additional protection products such as extended battery warranties arises—either from OEMs or third parties.
By understanding these risks thoroughly, electric vehicle owners can take more proactive protective steps. This is where an insurance broker plays an important role: helping you understand policy terms, evaluate battery risks, and find appropriate protection solutions.
Extended Battery Warranty: Solution or Just a Promise?
One effort to overcome the risk of decreasing battery capacity in electric vehicles is through an extended battery warranty, which is an extension of the battery warranty beyond the standard manufacturer’s warranty period. However, the question is—is this protection really effective, and who should provide it: the OEM (Original Equipment Manufacturer) or a third party?
OEM warranties are generally integrated with the manufacturer’s official systems and procedures. However, this protection still has limitations. Most only cover technical damage that is considered “abnormal”, and is highly dependent on the official diagnosis of a particular dealer or workshop. Claims can be rejected if external causes such as misuse, extreme temperatures, or unauthorized modifications are found.
On the other hand, some third-party companies are now starting to offer extended battery warranties as additional insurance products or special protection packages. These products are more flexible and can be tailored to vehicle conditions and user profiles. However, not all third-party providers have reliable technical capabilities or extensive service networks, so customers need to be careful in choosing.
Another challenge is transparency in terms and conditions. Both OEM and third-party warranties often include exclusions that consumers do not understand. For example, battery capacity degradation is considered “normal” if it is within a certain range and does not meet the claim criteria.
This is where the role of an insurance broker becomes very important. Brokers can help you objectively compare OEM and third-party extended battery warranties. With access to multiple providers and a deep understanding of policies, brokers can steer you toward coverage options that truly deliver value.
Rather than impulsively purchasing additional protection, it is better to first consult with a broker who understands the risks of electric vehicles.
Can Electric Car Insurance Cover the Risk of Battery Deterioration?
One of the important questions often asked by electric vehicle owners is: “Can electric car insurance protect against the risk of battery capacity degradation?” The answer is: not necessarily.
Currently, most motor vehicle insurance products in Indonesia—both TLO (Total Loss Only) and All Risk—are still designed for fossil fuel vehicles. The main protection covers physical risks such as collision, theft, fire, and damage due to natural disasters. Unfortunately, the risk of internal degradation of components such as batteries is not yet a standard part of electric vehicle insurance coverage.
Some insurers are experimenting with expanding coverage for electric vehicles (EVs), including protection for the electrical system and battery. However, this coverage is still very limited and generally only covers damage from an accident or verified technical malfunction—not natural degradation over time.
This creates a serious protection gap. The battery is the most expensive part of an EV—replacing it can cost 40–50% of the vehicle’s price. When capacity degradation is neither covered by the manufacturer’s warranty nor covered by insurance, vehicle owners can find themselves in a disadvantageous position.
As a solution, insurance broker can help you find a policy with more specific coverage extensions. In some cases, brokers can even work with underwriters and OEMs or third-party warranty providers to integrate battery protection into your EV insurance policy.
If you want to be truly protected, don’t just rely on general insurance. Consult a professional broker to evaluate the risk gap and find the most relevant protection solution for your electric vehicle.
The Strategic Role of Brokers in Finding the Best Protection for Electric Vehicles
Insurance brokers don’t just sell policies. They are risk advisors. In the context of electric vehicles, a broker will help you:
- Understanding the risks that are not covered by standard insurance.
- Compare policies from different companies.
- Designing a combination of additional insurance and warranty.
- Assess the reputation and reliability of third-party warranty providers.
- Accompanying when a claim occurs so that the process is fast and appropriate.
Insurance brokers like L&G Insurance Broker have experience in managing EV risks, including recommending battery protection products from verified vendors. In the long run, brokers help avoid the risk of being underinsured and ensure you don’t suffer major losses due to gaps in protection.
Case Study: Electric Car Owners Helped by Using Brokers
Mr. Andi, a professional in Jakarta, bought a premium electric car as his daily vehicle. A year later, he began to notice a significant decrease in battery capacity—the full range was reduced by almost 30%, even though the mileage was still relatively low. He contacted an authorized dealer, but his warranty claim was rejected because “the decrease was still within reasonable limits.”
Fortunately, Mr. Andi purchased an insurance policy through a broker who understood the risks of electric vehicles. Before the purchase, the broker had recommended an electric vehicle insurance package that included an extended battery warranty from a trusted third party, complete with a capacity reduction clause outside the OEM standard.
With the help of a broker, the claim process was submitted technically and quickly. The broker also helped communicate with the warranty provider and EV specialist workshops. As a result, Mr. Andi received a battery module replacement worth tens of millions of rupiah—without having to bear the loss himself.
This story shows how important it is to have a broker who not only sells policies, but also understands the context, technology and unique challenges of electric vehicles. In the case of EVs, it’s not just who your insurer is, but who stands with you when the risks come.
Insurance broker help EV owners understand the gaps in standard policies. They will identify whether the risks of battery degradation, battery module replacement, and vehicle charging systems are covered or not. Moreover, brokers can find additional products such as extended battery warranties from credible third parties, and compile them into a comprehensive protection package.
One of the main advantages of using a broker is access to a wide range of products from various insurance companies. This allows clients to compare premiums, coverage limits, exclusions, and quality of service transparently before making a decision. Brokers can also negotiate additional clauses (endorsements) to include battery protection—which is usually not available to direct buyers.
In the claim process, the broker becomes your representative in dealing with the insurance company. If there is a problem with the battery and there is an extension of the guarantee, the broker will help organize the documentation, technical communication with the surveyor, and submit valid technical arguments so that the claim can be paid.
In this era of electric vehicles, EV owners need a more strategic approach to protection—not just buying a cheap policy. Choosing an insurance broker who understands the risks of electric vehicles means you get a personal risk advisor who prioritizes education, transparency and optimal protection.
If you are a first-time EV buyer, or are planning to renew your vehicle policy, don’t hesitate to consult with an experienced insurance broker. Your protection is much stronger when accompanied by a party who understands the ins and outs of modern vehicle risks.
Tips for Choosing a Broker Who Understands the Risks of Electric Vehicles
Choosing an insurance broker is the right one is very important, especially for the protection of electric vehicles that have different risks than conventional cars. Here are some tips for choosing a broker who really understands the world of EVs:
- Have experience handling electric vehicle or EV fleet policies. Ask for their portfolio.
- Understand the ins and outs of EV technology, including battery degradation risks, charging systems, and after sales support from OEMs.
- Can clearly explain the extension of the guarantee, policy conditions, and protection gaps that need to be closed.
- Have access to a variety of relevant third party insurance product providers and warranty providers.
- Responsive and ready to assist in the claims process, including documentation and technical negotiations.
Don’t hesitate to ask specifically about how the broker can help protect your electric vehicle, including in the event of a battery problem.
Conclusion
Electric cars have many advantages—they are environmentally friendly, energy efficient, and emission-free. However, this technology also brings new challenges, especially when it comes to risk protection. Battery capacity degradation is one of the biggest risks that is often overlooked, and not all electric vehicle insurance is able to adequately cover it.
This is where the importance of the role lies in the insurance broker. With expertise and access to a wide range of products, brokers can help you find the best coverage, including extended battery warranties and warranty extensions to suit your EV needs.
Rather than buying a policy directly and regretting it when the claim is rejected, it is wiser to consult first. Contact a trusted broker such as L&G Insurance Broker who is experienced in electric vehicle protection.
Want your electric vehicle to be truly protected? Don’t take the risk yourself—hire a risk advisor who knows the way around.
📞 Contact us at 0811-850-7773 which understanding the risks of electric vehicles and able to develop relevant and effective protection solutions.
