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In this article, we cover the topics:“Turns Out It’s Different! These Are 5 Things That Differentiate Electric Car Insurance and Regular Car Insurance.”With the increasing use of electric cars in Indonesia, many vehicle owners still think that insurance for electric cars and regular cars is the same. In fact, the difference in technology creates new risks that require different protection.
Check out the full discussion and find out why the role of insurance broker It becomes very important to choose the right policy for your electric vehicle.
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Electric Car Trends in Indonesia
In recent years, electric vehicles have begun to attract the attention of the Indonesian people. Supported by government policies such as tax incentives, exemptions from import duties, and the development of a national battery ecosystem, the trend of electric cars is increasing. Not only global automotive manufacturers, but also local players are starting to compete to market electric vehicles to Indonesian consumers.
However, behind the euphoria of EV adoption, many users are still unaware that electric cars have different technical characteristics and risks compared to gasoline or diesel cars. One important aspect that is not widely understood is the fundamental difference in terms of vehicle insurance.
Many Electric Vehicle owners assume that regular car insurance policies can be used directly for electric vehicles. However, Electric Vehicles have specific components such as high-voltage batteries, electric motors, special cooling systems, and very different electrical risks. Conventional insurance often does not adequately cover these risks.
This article will discuss five key differences between electric car insurance and regular car insurance, as well as how insurance broker plays a vital role in helping you choose the right coverage. By understanding these differences, you can make more informed decisions to protect your investment in the electric vehicle era.
Important Components of Electric Cars That Need to be Protected
Electric cars are equipped with advanced technology that is significantly different from conventional cars. Therefore, the main components of the Electric Vehicle need to get specific and comprehensive insurance protection.
- The most important is battery. The high-voltage lithium-ion battery is the most expensive component in an EV, with a replacement value that can reach 30–50% of the total vehicle price. The risk of capacity degradation, overheating, and damage due to charging errors are real threats that are not necessarily covered by standard policies.
- Electric Vehicle and the drive system. Damage to electric cars due to short circuits or inverter failure is also a technical risk that requires special protection, because the repair process is very technical and expensive.
- Electronic control unit and software. Electric vehicles rely heavily on computerized systems. Software glitches, cyberattacks, or ECU failures can completely disable a vehicle. Conventional policies rarely cover damage caused by system bugs or firmware update errors.
- Charging system, both onboard charger and external equipment. Damage due to power surges, burnt cables, or malfunction of the charging device may result in a risk of fire or third party claims in the event of damage to public property.
- Due to the complex nature of the technology, EVs require a much more detailed and structured approach to protection. This is where the role of a broker is important in assessing insurance needs based on the type and specifications of the electric vehicle owned by the user.
Differences in Protection between Electric and Conventional Car Insurance
One common mistake made by EV owners is to equate EV insurance policies with conventional car insurance. Although both are classified as motor vehicles, the risk structure and workings of Electric Vehicle components are very different, so they require a different approach to insurance protection.
- Battery Risks Not Included in Conventional Policies
Most vehicle insurance policies in Indonesia only cover physical risks such as collision, theft, fire, or damage due to natural disasters. However, the risk of battery degradation, which is the decrease in energy storage capacity over time, is not considered a sudden and unexpected event, so it is excluded from standard coverage. - Risk of Overheating and Thermal Runaway
Electric cars have the potential to overheat or even catch fire due to thermal runaway in the battery. This condition can be very dangerous and damage the entire vehicle. Conventional policies do not necessarily cover damage due to internal chemical reactions if not caused by an external accident. - Electronic System Interruptions Not Guaranteed
Electric Vehicle systems rely heavily on software and electronic controls. Bug issues, firmware update errors, or control unit damage due to technical factors are not covered by regular vehicle policies. In fact, the repair costs can be very high and can only be handled by a specialist EV workshop. - No Warranty for Charging System and Additional Equipment
Conventional insurance usually does not cover damage to home charging stations, charger cables, or other supporting equipment. If damage occurs due to short circuits or lightning strikes during charging, claims may be rejected if not explicitly stated in the protection clause. - No Integration with Manufacturer (OEM) Warranty
Traditional car insurance is not connected to the OEM warranty system, making the claim process for technical damage or battery degradation more complicated. In EVs, integration between the manufacturer’s warranty, third-party warranty, and insurance policy is essential to ensure all risks are covered.
By understanding these differences, you will be better prepared to choose an insurance policy that is not only affordable, but truly protects your electric vehicle in its entirety.
In addition to the technical aspects, an important thing that prospective Electric Vehicle owners need to pay attention to is the cost of insurance. Many people think that EV insurance is much more expensive. In fact, electric car premiums are generally only 5–10% higher than conventional cars, depending on the value of the vehicle, type of coverage, and risk profile.
Example: An electric car worth Rp700 million can be subject to an annual premium of around Rp7–10 million depending on whether it uses a TLO (Total Loss Only) or All Risk policy. This difference is due to the risk of expensive battery replacement and the need for certified technicians during repairs.
However, these premium costs can be reduced by using broker services. Experienced brokers can negotiate special rates, arrange hybrid protection (insurance + warranty), and ensure that customers are not overpaying or underinsured.
So, don’t just compare premiums, but compare the benefits. Comprehensive protection on the battery, electronic system, and the charging station is much more important than a small premium difference.
Battery Risks, Overheating, and Replacement Costs
The battery is the most vital and most expensive part of an electric vehicle. The value of the battery can reach 40% to 50% of the overall price of the vehicle. Therefore, damage or decreased battery performance not only affects the performance of the vehicle, but also the resale value.
- Battery Capacity Degradation
All Electric Vehicle batteries will experience capacity degradation over time. Typically, within 5–8 years of use, capacity can decrease by 20–30% depending on usage patterns, ambient temperature, and charging habits. Unfortunately, conventional insurance policies classify this degradation as wear and tear and do not provide replacement. - Overheating dan Thermal Runaway
If the battery cooling system fails or the vehicle is subjected to frequent fast charging for long periods, the potential for overheating increases. In extreme cases, this can trigger a thermal runaway—a chemical chain reaction within the battery that can lead to a fire. This risk is real and has occurred in several countries. However, not all policies cover damage from internal causes like this. - Very Expensive Replacement Costs
Replacing an Electric Vehicle battery can cost tens or even hundreds of millions of rupiah depending on the make and model of the vehicle. If the risk is not covered by insurance or additional warranty, then the entire cost will be borne by the owner. This can be a major financial burden, especially for individual users or owners of Electric Vehicle fleets. - Alternative Solution: Extended Battery Warranty
In response to the limitations of conventional policies, an additional protection option has emerged in the form of an extended battery warranty. This warranty can be provided by the manufacturer (OEM) or a third party, and covers a decrease in battery capacity up to a certain limit (for example below 70%). - Brokers As Facilitators of Comprehensive Coverage
Insurance broker can be a liaison between Electric Vehicle owners and battery warranty and vehicle insurance providers. With a good technical understanding, brokers can develop hybrid protection solutions that include insurance and extended warranties, as well as assist in the claims process in the event of battery damage.
Electric Car Insurance Claim Challenges You Need to Know
One important aspect that is often overlooked by electric vehicle owners isoelectric car insurance claim process. Although the claim procedure is basically not much different from conventional cars, there are a number of unique challenges that can arise.
a. Limitations of Partner Workshops
Availability partner workshops that have EV certificates are still limited in Indonesia. This can cause the claim process to take longer because the vehicle must be taken to a specific location that may be far from the owner’s domicile. The workshop must also have certified technicians to handle high-voltage batteries and special electrical systems.
b. More Complex Diagnostic Examination
Unlike ordinary cars, electric car damage diagnosis requires special tools and sophisticated computerized systems. If there is no integration between the workshop and the insurance company, the damage report can be rejected or considered invalid by the insurer.
c. High Replacement Costs
Electric car parts replacement costs much more expensive, especially when it comes to batteries or electrical modules. This is where it becomes important to have the best electric car insurance policy, which explicitly covers EV parts with adequate coverage limits.
d. The Importance of Consulting with a Broker
With the above conditions, insurance broker not only act as a police seller, but also as companions during the claims process. A broker who understands the technical details of electric vehicles will facilitate documentation and communication between workshops, owners and insurance companies.
How to Choose the Right Electric Car Insurance
Nowadays, many insurance providers are starting to offer products electric vehicle insurance in indonesia. However, not all products are created equal. Here are some tips for choosing the right protection.
a. Pay Attention to the Battery Clause
Make sure the policy you choose coversEV battery damage, either due to overheating, short circuit, or capacity reduction beyond normal limits. If it is not stated in the policy, request additional clauses (endorsement) through the broker.
b. Check Electronic Component Coverage
Electric cars are highly dependent on control units, sensors and software. Choose insurance that also covers them.software and ECU (Electronic Control Unit) damage due to system failure or external interference.
c. Consider Third Party Protection
Some policies offer additional coverage for damage to other people’s property while charging, such as short circuits that damage garages, homes, or public property. This is especially important for Electric Vehicle owners who frequently charge in public places or offices.
d. Compare Not Only Price, But Benefits
Don’t get caught up in cheap premiums. Compare Benefits and coverage limits. Sometimes a slightly higher premium can provide much more comprehensive coverage.
The Future of Electric Car Insurance
The development of electric vehicles cannot be separated from the evolution of their financial protection. In the future, we can expect thatElectric vehicle insurance products will become more specific, integrated with vehicle data (IoT), and provide risk assessment based on driving behavior.
Adaptive brokers will become strategic partners for EV users, not only in purchasing policies, but also in educating the market, facilitating cooperation with certified workshops, and connecting with providers.third party battery warranty.
Why Go Through an Insurance Broker?
In the face of the complexity of electric vehicle risks, choosing the right insurance is not easy. This is where the important role of an insurance broker becomes crucial, especially in developing solutions that suit the risk profile and EV technology.
- Brokers Understand EV Technical Risks
An experienced broker will understand the intricacies of electric vehicle technology, including the risks of battery degradation, potential damage to electric motors, and integration with digital systems. This understanding forms the basis for developing relevant and comprehensive protection. - Can Access Additional Protection Products
Not all insurance companies have products specifically aimed at EVs. Brokers have access to multiple insurance companies and warranty providers, so they can combine multiple products into one complementary solution. - Customize Your Policy to Your Needs
Brokers can customize policy wording and request additional clauses to cover certain risks specific to EVs. This is important because standard coverage is often too general and does not cover the technical needs of EVs. - Claim Process Efficiency
In the case of technical damage or battery problems, the claims process can be complicated and lengthy. Brokers can be a companion who organizes documentation, communication with insurers, and negotiations if necessary. - Ongoing Education and Mentoring
Brokers are not only present when closing the policy, but also provide regular education, updates on technological risk developments, and even suggest protection upgrades if needed.
Conclusion
Electric vehicles are the future of Indonesian transportation. However, this technological change also brings new risks that are not yet fully understood by many users. The risk of battery degradation, overheating, expensive component replacement costs, and software integration problems are challenges that cannot be answered by conventional insurance alone.
For that reason, the best solution is to utilize the role of insurance broker who understands the electric vehicle technology landscape and is able to design relevant, flexible and comprehensive protection.
If you are an electric vehicle owner or distributor, don’t let hidden risks threaten your investment. Talk to an experienced broker who can bridge you with the best insurance companies and warranty providers.
📞 Call us at 0811-850-7773 and get electric vehicle insurance protection that is not just a formality, but truly functional!
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