The floods in the UAE in April have led to a significant increase in insurance premiums for electric vehicles, as insurers reassess risks and costs linked to water damage and repairs.
Industry experts say that the surge in demand for new insurance policies and renewals has driven up costs, impacting EV owners across the country. The extreme weather incident highlighted the vulnerability of EVs to water-related damage, prompting insurers to reassess their pricing structures.
Several factors contribute to the rising costs, including the high expense of repairing electric cars, which often require specialised parts and skilled technicians. Additionally, the risk of water damage to the sophisticated electrical systems of EVs further complicates the repair process, making it more costly than conventional vehicles.
As a result, EV owners in the UAE are now facing higher premiums, a trend that could affect drivers’ willingness to switch to electric vehicles in the region. It’s a set-back to the UAE government’s efforts to promote green transportation through incentives and infrastructure investments.
Insurance companies are urging EV owners to consider comprehensive coverage that includes protection against natural disasters. They also recommend taking preventive measures to minimise the risk of damage, such as avoiding driving through flooded areas and ensuring vehicles are parked in safe, elevated locations during extreme weather.
While the recent circumstances have raised concerns, some industry insiders believe that a better understanding of the risks associated with EVs will eventually lead to more tailored and competitive insurance products. In the meantime, EV enthusiasts and current owners will need to navigate the evolving landscape of insurance premiums in the UAE.
If there’s a silver lining, the total cost of ownership (purchase cost and usage cost combined) of EVs is still lower than conventional cars.
