Thai association cautions on insurance coverage for EVs

Tokio Marine Safety Insurance temporarily suspended standard premiums.

The Thai General Insurance Association (TGIA) cautioned member insurers regarding the burgeoning electric vehicle (EV) market in the country, as reported by the Bangkok Post.

EVs pose potential challenges as some insurance companies hesitate to provide coverage, cautioned the Thai Automotive Industry Association (TAIA). 

Tokio Marine Safety Insurance recently announced a temporary suspension of its standard EV insurance premiums, opting to assess new rates on a case-by-case basis.

The move comes amid concerns over wide price fluctuations and high claim values associated with EVs. 

Insurers, grappling with significant repair costs, particularly for EV battery packs, are reevaluating their coverage strategies. 

In some cases, even minor damage to an EV's battery pack necessitates full replacement, which can account for a substantial portion of the vehicle's value.

Whilst Tokio Marine clarified that existing customers can renew policies based on their claims history, concerns remain within the industry. 

The TGIA highlighted the higher costs of EV spare parts and emphasised the complexity insurers face in setting competitive premiums.

Despite these challenges, Thailand's EV market is expanding, with many vehicles imported from China and plans for local production and export. 

The TAIA is engaging with global EV manufacturers and the TGIA to address insurance concerns and ensure the market's sustainable growth.

Meanwhile, insurers are adjusting their EV insurance criteria, including premiums and battery claim conditions, effective from June. 

This evolving landscape necessitates corresponding adjustments in auto loan practices, with considerations for higher collateral requirements and revised insurance conditions for EVs.