4 weeks ago
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Keisha Ta-Asan - The Philippine Star
February 19, 2025 | 12:00am
While international data is useful, PIRA executive director Michael Rellosa said that it could not be directly applied to the Philippine market due to differences in conditions.
STAR / File
MANILA, Philippines — The Philippine Insurers and Reinsurers Association (PIRA) is finalizing the guide rates for electric vehicle insurance, taking into account the unique risks associated with EVs and referencing data from neighboring countries like Malaysia and Thailand.
While international data is useful, PIRA executive director Michael Rellosa said that it could not be directly applied to the Philippine market due to differences in conditions.
“We are trying to marry the two and come up with guide rates going forward,” he said.
The association aims to release the guide rates before the middle of the year.
PIRA officials noted that insuring EVs presents unique challenges, including the high cost of batteries, increased vehicle weight and heightened risks from flooding and spontaneous combustion.
“If an EV gets into an accident and its battery is damaged, that alone could account for one-third to one-half of the vehicle’s value,” Rellosa said.
Alexander Reyes, a member of PIRA’s motoring committee, said that insurance rates for EVs in the country could be roughly double those of traditional vehicles.
Some insurers have been hesitant to offer coverage due to concerns over high losses in other markets, but others have begun testing EV insurance on a limited scale.
“Insurers will have to come in at a certain point because there are loans, and those loans have to be insured,” Reyes said.
However, he noted that with fewer insurers offering EV coverage, competition remains low, allowing companies to charge higher rates.
Insurers are still evaluating how factors like rapid depreciation, costly battery replacements and flood risks will impact policy pricing. Unlike traditional cars whose value declines gradually over time, an EV’s worth is closely tied to its battery life.
Insurance terms for EVs could also become stricter.
“In other markets, flood damage to an EV’s battery is not covered,” Reyes said.
“Here, insurers may impose similar exclusions or set higher deductibles for battery-related claims,” he added.
Beyond EVs, PIRA has already submitted proposed rates for motorcycle taxi insurance, covering passengers of ride-hailing services like JoyRide and Angkas.
“We already have rates for personal accident coverage for passengers, but it’s still under review by the Insurance Commission,” Rellosa said. The timeline for approval remains uncertain.
