Electric vehicle (EV) owners planning to avail of auto insurance can expect more expensive premiums, as guide rates will be published by midyear or earlier, according to a senior official of the Philippine Insurers and Reinsurers Association (PIRA).

The non-life insurance industry group's motor technical committee is currently drafting the guide rates for EV insurance, for submission to the Insurance Commission (IC), PIRA executive director and trustee Michael Rellosa told reporters on the sidelines of the overseas seminar of the Insurance School of Japan (ISJ) on Tuesday, Feb. 18. Its publication is expected “before the middle of the year.”

Rellosa said PIRA comes up with the rates and submits them to the IC for assessment and approval. The IC is the government regulatory authority overseeing the insurance, pre-need, and health maintenance organization (HMO) sectors.

As of now, Rellosa noted that the industry is still working on the updates for EVs.

“We have asked for assistance from countries that have already covered electric vehicles like Malaysia, Thailand. 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,” he said.

In general, premium rates are “significantly higher for electric vehicles,” according to Alexander Reyes, a member of PIRA's motor committee.

“Companies are still trying to feel their way. Some companies actually opted not to insure electric vehicles first because they heard that the losses are bad in other markets. But some companies are trying, maybe trying with a few accounts,” Reyes further said.

Additionally, Rellosa noted several problems that PIRA faces with EVs, foremost of which is the cost of the vehicle itself.

“If an electric vehicle has an accident and the battery runs out, that’s already one-third of the value of the vehicle. One-third to one-half,” he said, stressing that the association has identified “a lot of issues that are unique to electric vehicles."

Beyond that, he also noted that the quiet operation of EVs raises safety concerns, while batteries placed underneath are vulnerable to road damage and flooding, among other risks.

With EVs being high-risk, Reyes said rates for electric cars are significantly higher, possibly double than those of regular cars and other vehicles.

When compared to local market rates, this double-the-regular-vehicle rate was described by Reyes as “too low.”

Relative to regular vehicles, there are fewer insurance companies covering EVs, Reyes noted. As such, insurers charge higher rates to policyholders or clients due to the low competition.