Insuring electric vehicles (EVs) in the Philippines may cost significantly more than traditional gas or diesel vehicles, with premiums potentially doubling, according to the Philippine Insurance and Reinsurance Association (PIRA). Alexander Reyes, PIRA Motor Committee Member, told reporters that EV insurance could be “maybe double” or “definitely higher” than regular vehicles, though exact rates depend on individual insurance companies.
PIRA is working to establish guide premium rates for EVs by mid-year, drawing from international data while adapting to local conditions. “We have asked assistance from countries that have already covered electric vehicles like Malaysia and Thailand,” said PIRA Executive Director Michael L. Rellosa. “But we can’t rely solely on their statistics because their data differs from ours.”
EVs are considered riskier due to several factors. Their batteries, which are typically worth one-third to one-half of the vehicle’s value, pose significant repair costs if damaged. The heavier weight and quieter operation of EVs can also increase accident risks. Moreover, water ingress damaging the batteries can cause major issues. Historical cases of lithium batteries catching fire have raised additional concerns.
“If an electronic vehicle has an accident and the battery runs out, that’s already one-third to one-half of the value of the vehicle,” Rellosa explained. The condition of local roads further complicates matters as water could potentially short-circuit the batteries.
Insurance policies for EVs may need stricter terms due to these unique risks. Reyes noted that insurers might exclude flood damage for EVs, a condition not typically found in standard policies. “If you go through a flood, for example, it’s not covered… Insurance companies may set conditions where it’s not allowed.”
The depreciation rate of EVs also differs from traditional vehicles, potentially requiring insurers to adjust their rating structures. “If the fair market value of the vehicle goes down faster, the insurer might need to change its basis for the rate,” Reyes said.
This development in EV insurance comes as the non-life insurance industry in the Philippines reported a 10.49% year-on-year growth in net premiums written to P71.84 billion in 2024, driven by the motor car business. The sector’s gross premiums written rose by 9.62% to P134.12 billion, while premiums earned increased by 6.58% to P67.79 billion. Despite this growth, the industry’s combined net income slightly decreased by 2.63% to P8.89 billion.
