[Electric Vehicle Insurance] Why is it more expensive than traditional car insurance? How do their coverages differ?

Electric vehicles are often more energy-efficient than conventional cars, helping drivers save a significant amount on fuel costs. This has led many car owners in Hong Kong to choose electric vehicles, driving a sharp increase in demand for EV insurance. In fact, the cover provided by EV insurance is broadly similar to that of conventional car insurance, but there is a considerable difference in price, making it one of the key factors in car owners’ choice of which vehicle to buy. What is the main reason for the difference in premiums between the two? What should you pay attention to when buying EV insurance?

In Hong Kong, the law requires vehicle owners to purchase third party liability insurance (third party cover), and some owners also opt for comprehensive cover, which provides broader protection.

In Hong Kong’s electric vehicle market, besides Tesla, electric vehicles from BYD, BMW and Mercedes-Benz are also becoming increasingly popular. 10Life obtained quotations from six insurers offering motor insurance in the market to compare the prices of comprehensive cover and third party cover. This comparison uses a 2024 BYD SEAL as an example, with a convertible body type and a vehicle value of HK$300,000. The policyholder is assumed to be 35 years old, work in an office role, have 10 years of driving experience, no claims in the past three years, a no-claims discount (NCB) of 60%, and no traffic accident records in the past five years. 

If readers would like to learn more about the differences between comprehensive and third-party insurance, as well as Tesla insurance, they may refer to the following articles.

Further reading:  
【Car comprehensive insurance and third-party insurance comparison】Is comprehensive insurance worth buying? Which one offers the best value for money?
【Tesla insurance comparison】Why is car insurance particularly expensive? 6 major reasons that may help reduce premiums 

As more electric vehicle brands enter the Hong Kong market, driving down electric vehicle prices, and as more car parks across Hong Kong gradually install charging points, making charging more convenient for owners, more people are choosing electric vehicles. However, Hong Kong is a place where it is easy to buy a car but difficult to maintain one. In addition to the usual costs, owners also need to pay attention to electric vehicle insurance premiums, which are generally higher than those for conventional motor insurance.

3 major reasons electric vehicle insurance premiums are higher

• Drivers are more likely to have accidents, increasing the risk 
  Compared with conventional vehicles, electric vehicles accelerate more quickly, and their braking performance also differs from that of traditional cars. If drivers encounter an emergency, they may be less able to stop in time, leading to accidents and, in turn, increasing the risk of vehicle damage.
• Parts are expensive 
  As the structure of conventional cars and electric vehicles differs significantly, not every repair garage can service electric vehicles. With limited competition, both replacement parts and labour costs are more expensive than for conventional cars. Tesla owners should note that repairs can only be carried out at approved repair centres, which may push up repair quotes.
• The accident risk and repair costs of electric vehicles are both higher, reducing insurers’ willingness to underwrite them, which is also one of the reasons premiums are higher. 

Although the premiums for electric vehicle insurance and traditional car insurance differ, the scope of cover offered by insurers is broadly similar. However, electric vehicle insurance comes with more additional terms and conditions. For example, some insurers impose an additional excess for owners of new electric vehicles, or require a certain annual mileage; exceeding the mileage limit may result in an additional excess or higher premiums.

If readers would like to learn more about the excess for motor insurance, please refer to the article below.

Further reading: 【Comparison of online third-party motor insurance premiums】Motor insurance premiums can differ by nearly 1x; a detailed explanation of third-party insurance meaning and excess 

QA: What is charger liability cover?  

Charger liability cover includes liability issues arising from chargers, such as when a driver causes a fire while using a charger in a public car park. Some insurers only provide cover for incidents caused by Tesla original chargers. If a driver wishes to use a private charger from another brand, additional cover is required.  

QA: Is the battery of an electric vehicle covered?

Answer: Unfortunately, whether under comprehensive cover or third-party cover, the battery of an electric vehicle is excluded, as EV batteries are naturally consumable items. However, if the battery is damaged in an accident, the insurer may provide cover.  

QA: Does the policy include towing service?  

Answer: Petrol car owners may run out of fuel while driving, and electric vehicles may also run out of charge during a journey, meaning the owner may need to call for towing. When comparing different insurance plans, policyholders may wish to note the maximum reimbursement limit for towing charges. 

Note: This article was last updated on 6 March 2025.  

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.