The Philippine Insurers and Reinsurers Association (PIRA) says its expects to finalise and publish guide rates for electric vehicle (EV) insurance before the middle of the year.
Michael Rellosa, PIRA’s Executive Director and Trustee, confirmed to reporters during the overseas seminar of the Insurance School of Japan (ISJ) that the draft guide rates have already been submitted to the Insurance Commission (IC) and are currently under review.
“We have asked for assistance from countries that have already covered electric vehicles like Malaysia, Thailand,” Rellosa said, as reported by the Manila Bulletin. “But of course, we can’t rely on their statistics because their data is different from ours. So we’re trying to marry the two and come up with guide rates going forward.”
Insuring EVs presents distinct challenges, particularly due to their expensive components and repair costs. One of the primary concerns identified by PIRA is the high cost of EV batteries. “If an electric 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.
Additional risks, such as EVs’ quiet operation contributing to potential road safety issues and their batteries being vulnerable to road damage and flooding, are also being considered in the guide rate formulation.
While insurers are still evaluating how these factors will influence policy pricing, Alexander Reyes, a member of PIRA’s motor committee, noted that EV insurance premiums are “significantly higher” than those for conventional vehicles and could potentially reach double the rates of traditional cars. He added that “companies are still trying to feel their way,” with some insurers initially opting out of covering EVs due to loss concerns from other markets, while others are cautiously entering the sector with select accounts.
Reyes also noted that, relative to conventional vehicles, fewer insurers are offering EV coverage, which has resulted in lower competition and higher premiums.
The finalised guide rates are expected to provide clarity for insurers and policyholders as the country moves towards greater EV adoption.
Beyond EVs, PIRA has also submitted proposed rates for motorcycle taxi insurance, covering passengers of ride-hailing services like JoyRide and Angkas. These rates are currently under review by the IC, with no confirmed timeline for approval.
