Liga Asuransi – Hello automotive friends, how are you? May you, your family and your business always be in good condition and successful. In this blog, we focus on risk management and insurance, providing useful insights to protect your vehicles and valuable assets.
This time, we will discuss electric vehicle insurance, which is increasingly important along with the increasing use of electric cars in Indonesia. If you find this article useful, please share it with your colleagues so that they too get valuable information. Don’t forget, find more interesting articles on this blog to broaden your horizons! 🚗⚡
In recent years, electric cars have become increasingly popular in Indonesia in line with increasing public awareness of environmentally friendly energy and government support through various incentives, such as tax exemptions and subsidies for electric vehicles. However, behind the advantages of electric cars, there are challenges, one of which is higher insurance costs compared to fossil fuel cars.
Many electric vehicle owners are starting to question why EV insurance premiums are more expensive than petrol cars. This is caused by several main factors, such as higher vehicle prices, expensive repair costs, and the risk of batteries requiring special protection. In addition, workshops specializing in electric cars are still limited, so repairs can cost more and take longer.
In general, electric car insurance premiums range between 3-5% of the vehicle price per year, while conventional car premiums are only 2-3%. This difference is quite significant and is an important consideration for prospective electric vehicle owners.
In this article, we will discuss in depth the factors that influence EV insurance premiums, repair costs, battery risks, and how to get electric vehicle insurance at the best price. If you’re considering insurance for an electric car, this article will help you make a smarter decision.
Risk Differences between Electric Cars and Fossil Fuel Cars
Electric cars and fossil fuel cars have different structures and technologies, which directly affect insurance risks and costs. Electric cars use batteries and electric motors, while petrol cars rely on internal combustion engines. These differences cause variations in risks and maintenance costs that impact electric vehicle insurance pricing factors.
Risk Factors for Electric Cars
- Risk of Short Circuit or Fire Due to Battery
- Electric cars use lithium-ion batteries which are susceptible to overheating and short circuits, especially in the event of an accident or fault in the cooling system.
- EV battery fires are more difficult to extinguish than fossil fuel car fires.
- Limited Specialty Workshop Availability
- Not all workshops are capable of handling electric car repairs.
- EV-specific repair shops have certified technicians and more expensive tools, resulting in higher repair costs.
- Higher Parts Costs
- Main components such as batteries, inverters and electric motors have higher prices than conventional car engines.
- Waiting times for spare parts are also longer because the number of suppliers is still limited.
Risks of Conventional Cars
- Risk of Fire Due to Fuel Leak
- Internal combustion engines run on combustible fuel. Fuel leaks can cause fires that spread quickly.
- Lower Maintenance Costs
- Gasoline engines are easier to repair because spare parts are more readily available and cheaper than electric car components.
- There are more conventional car repair workshops, so repair costs and waiting times are lower.
Why Does EV Insurance Tend to Be More Expensive?
Compared to conventional cars, electric cars have a higher risk in terms of repair costs, repair shop availability, and the risk of batteries that could short circuit or catch fire. EV insurance premiums are more expensive because insurance companies have to cover greater risks.
However, with technological developments and the increasing number of EVs on the market, future electric vehicle insurance costs could become more competitive, especially with the presence of more EV repair shops and parts manufacturers.
Electric Car Repair and Parts Costs
Electric cars have higher repair and spare parts costs compared to fossil fuel cars. This is due to the use of advanced technology, limitations of specialized workshops, and more expensive component prices. This cost is also a major factor in the cost of electric car insurance claims, which makes EV insurance premiums higher than conventional cars.
- More Expensive Spare Parts Prices
Electric cars have main components such as batteries, inverters and electric motors, whose prices are much higher than gasoline engine parts. As an example:
The price of an electric car battery can reach 30-50% of the vehicle price, with replacement costs ranging from IDR 150 million to IDR 400 million, depending on the brand and battery capacity.
Electric motors and inverters also have high prices, because their components are not as common as gasoline engines.
- Higher Repair Costs because Special Technicians are Required
Repairs to electric cars can only be carried out in certified workshops with specialized technicians, the number of which is still very limited in Indonesia. These technicians require special training in handling high-voltage electrical systems, which increases the price of electric car repairs.
- Repair Cost Comparison Case Study
Electric Motor Replacement vs. Gasoline Engine Replacement
- EV electric motorbike: IDR 100 – 250 million
- Gasoline engine (Toyota Avanza or Honda HR-V): IDR 40 – 100 million
Battery Cooling System Repair Cost vs. Price Conventional Car Radiator
- EV battery cooling system: IDR 20 – 50 million
- Gasoline car radiator: IDR 2 – 5 million
- Long repair time
Because the availability of spare parts for electric cars is still limited, repair times can be longer than for petrol cars. If a major breakdown occurs, electric car owners will have to wait longer to get the necessary parts, which can extend repair times by weeks or months.
Higher repair prices for electric cars and limited technicians and workshops are the main factors that make EV insurance premiums more expensive than conventional cars. Therefore, electric car owners need to consider insurance that includes protection for main spare parts such as batteries and electric motors in order to avoid very high repair costs.
The Role of Batteries in Electric Car Insurance Costs
The battery is the most expensive component in an electric car, often accounting for 30-50% of the vehicle’s price. Therefore, the battery is the main factor influencing the price of EV insurance premiums, due to its risk and high replacement costs. In the event of damage or theft, repairs can be very expensive, making insurance coverage for the battery especially important for electric car owners.
Main Risks of Electric Car Batteries
Accidental Damage
- If an electric car is involved in a serious accident, the battery could suffer structural damage or even explode due to a short circuit.
- The cost of repairing or replacing a battery can be very high, depending on the extent of the damage.
- Decreased Battery Capacity Due to Long Term Use
- Like cellphone batteries, electric car batteries will experience capacity degradation over time.
- Some EV manufacturers provide battery warranties of up to 8 years or 160,000 km, but after that, the cost of replacing the battery is borne by the vehicle owner.
Battery Theft due to High Resale Value:
EV batteries have a high value on the black market, making them targets for theft, especially in areas that do not have good vehicle security systems.
Comparison of the Cost of Replacing EV Batteries and Conventional Machines
- Electric car battery (eg Tesla Model 3, Hyundai Ioniq 5): IDR 150 – 400 million
- Conventional petrol engine (Toyota Avanza, Honda HR-V): IDR 40 – 100 million
From this comparison, it is clear that battery replacement costs are much more expensive than conventional engines, which causes higher electric car insurance premiums.
How Does Insurance Address Battery Risks?
Insurance companies are starting to offer electric car battery insurance as part of EV vehicle policies, including:
- Protection for battery replacement due to accidents
- Insurance against the risk of fire due to overheating or short circuit
- Theft protection for batteries and major spare parts
With EV battery insurance, electric car owners can have more peace of mind when driving, without having to worry about very expensive replacement costs. Therefore, before choosing electric car insurance, make sure the policy you choose includes battery protection so that your vehicle still gets maximum protection.
Safety Factors Affecting Electric Car Insurance Premiums
Safety is one of the main factors in determining the price of electric vehicle insurance premiums. While electric cars have some safety advantages over fossil fuel cars, there are also special risks that make EV insurance premiums more expensive.
Electric Car Safety vs. Gasoline Car
- Safer Electric Car Structures
- Electric cars do not have explosive fuel tanks, making them safer in accidents involving heavy impacts.
- The position of the battery placed at the bottom of the vehicle helps lower the center of gravity, so the risk of rolling over is lower than in conventional cars.
- Advanced Safety Features in Electric Cars
- Many modern electric cars are equipped with an automatic battery shutdown system in the event of an accident, which reduces the risk of fire or short circuit.
- Technology such as shock sensors and automatic circuit breakers can minimize the impact of collisions that have the potential to cause sparks.
Factors That Increase EV Insurance Premiums
- The risk of fire due to short circuits is more difficult to extinguish
- If a fire occurs in a lithium-ion battery, firefighters need special methods to extinguish the fire.
- EV battery fires can last longer than gasoline fires due to thermal runaway (a chain reaction that accelerates heat and fire).
- Expensive Safety Technology Repair Costs
- Electric cars are equipped with sensor-based safety systems and advanced electronics, such as 360-degree cameras, radar and battery monitoring systems.
- If one of these systems is damaged, replacement costs can be very high, resulting in increased insurance premiums.
- There are still limited workshops that can handle EV repairs
- Electric car repairs cannot be done at just any repair shop because they require a certified technician.
- Special EV workshops are still limited in number, so the cost of repair services is higher than for conventional cars.
How Do Safety Factors Affect Premium Prices?
Even though electric cars have more advanced safety systems, repair costs and the risk of battery fires make EV insurance premiums more expensive. Insurance companies consider these risk factors in determining premiums in order to cover the potential for greater claim costs compared to fossil fuel cars.
With the increasing use of electric cars and developments in safety technology, in the future EV premium prices could become more competitive. However, for now, EV owners should consider insurance that includes battery protection and fire risk to get the best protection.
How to Get Electric Car Insurance at the Best Price?
Even though electric car insurance premiums are more expensive than petrol cars, there are several ways to get cheap EV insurance without sacrificing coverage. Here are some tips for getting cheap electric vehicle insurance while still getting maximum benefits.
- Use price comparisons from several insurance companies
Each insurance company has different premium and coverage policies. Before choosing, compare several offers to find the policy with the best price and coverage that suits your electric vehicle needs.
- Select Appropriate Protection Coverage
Not all EV owners need All Risk insurance, especially if the vehicle is rarely used or has a high security system. As an alternative, a Total Loss Only (TLO) policy can be a cheaper option while still providing protection against the risk of total loss due to accidents or theft.
- Take advantage of technology to get discounts
Many insurance companies offer discounts for electric cars equipped with additional safety features, such as:
- GPS Tracker to reduce the risk of theft
- Sensor-based safety system that detects collisions or potential danger
- Driver monitoring feature that monitors driving style and provides discounts for drivers with a good track record
- Use insurance broker services such as L&G Insurance Broker
Using an insurance broker like L&G Insurance Broker can help you get the best deal with more competitive premiums. Insurance brokers have access to a variety of insurance providers and can help negotiate the best price and coverage for your needs.
Benefits of using an insurance broker:
- Access to multiple insurance companies to get the best comparison
- Assistance in choosing a policy that suits your needs
- Easier and faster claims process
- Take advantage of promotions and discounts from insurance companies
Some insurance companies offer special discounts for electric vehicles because they are considered environmentally friendly vehicles. Apart from that, promotions for new customers or discounts from electric car dealers can also help reduce premium costs.
To get cheap electric vehicle insurance, compare prices, choose appropriate protection coverage, take advantage of security technology, and use broker services such as L&G Insurance Brokers. With this strategy, you can get the best protection at a more efficient price for your electric car. 🚗⚡
Conclusion
Electric cars do have higher insurance premiums than fossil fuel cars, but they also offer broader protection. The main factors that influence the price of EV insurance premiums include higher vehicle prices, battery risk, high repair costs, and safety factors. Apart from that, the limitations of specialized workshops and expensive spare parts mean that the cost of insurance claims for electric cars is higher than for conventional cars.
However, with the increasing adoption of electric vehicles in Indonesia, many insurance companies are starting to offer special products that cover battery protection, fire risk due to short circuits, and emergency services such as evacuation if the battery runs out.
To get the best policy at a more competitive price, use the services of an insurance broker such as L&G Insurance Broker. As a professional broker, L&G can help you compare various insurance offers, choose appropriate protection coverage, and simplify the claims process.
Don’t leave your electric car without optimal protection! Contact L&G Insurance Brokers now for a free consultation and get the best deal on your electric vehicle insurance.
Looking for insurance products? Don’t waste your time and contact us now
HOTLINE L&G 24 JAM: 0811-8507-773 (CALL – WHATSAPP – SMS)
Website: lngrisk.co.id
Email: oktoyar.meli@lngrisk.co.id
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