Electric vehicles (EVs) are rapidly gaining popularity across the UAE, yet many owners are discovering that the cost of insurance remains significantly higher than for conventional petrol cars. While overall car insurance rates have remained stable this year, EV premiums are still 20 to 35 percent higher, according to industry experts.

The UAE leads the Gulf region in EV adoption, with around 24,000 electric and hybrid vehicles sold in 2024. However, insurers from companies such as Sukoon and Fidelity have noted that repair and insurance infrastructure is still catching up to the pace of electric mobility.

Why EV Insurance Is Higher

The primary reason for elevated premiums is the high cost of EV components, particularly batteries and motors, which can account for nearly 40 percent of a car’s value. Replacing or repairing these components is complex and expensive, with new batteries costing between Dh60,000 and Dh80,000. Only a limited number of workshops in the UAE are equipped to handle such repairs.

Additionally, EVs tend to have higher claim ratios—typically 8 to 12 percent compared to 5 to 7 percent for petrol vehicles—due to their intricate electrical systems and compact designs. Some insurers add a “risk-loading” fee to EV policies to cover these uncertainties and the limited long-term accident data available.

Repair Challenges

Electric vehicles often feature single-frame body designs, meaning even minor collisions can require replacing entire sections rather than just specific parts, which raises repair costs and extends turnaround times. The shortage of workshops with the proper diagnostic tools and trained technicians, especially for newer or imported EV models, further complicates maintenance. In some cases, owners import spare parts directly to avoid delays.

The limited number of authorised dealers for certain imported EV brands also creates challenges in sourcing certified parts and maintaining warranties.

Policy Coverage and Considerations

Most EV insurance policies now include battery protection clauses, covering total or partial damage caused by accidents. However, coverage typically excludes issues from improper charging or the use of non-certified home chargers. Some insurers also offer roadside charging assistance for drivers who run out of power.

While EV policies function similarly to conventional car insurance, these added clauses and exclusions mean that owners must carefully review their coverage, particularly for batteries, software, and charging equipment.

Cost-Saving Measures

To reduce expenses, some UAE EV owners are opting for third-party liability insurance instead of comprehensive coverage. Comprehensive insurance can range from Dh3,500 to Dh8,000 annually depending on the vehicle, compared with Dh3,000 to Dh6,000 for petrol cars. Third-party insurance is cheaper but only covers damage to other vehicles, leaving owners responsible for potentially costly repairs to their own EVs.

Future Outlook

Industry experts anticipate that the gap between EV and petrol car insurance will narrow as the market matures. The growth of trained repair technicians, certified workshops, and a steady supply of spare parts will help lower repair and insurance costs. As more accident and performance data become available, insurers will be able to price premiums more accurately.

For now, owning an EV in the UAE offers clear environmental and fuel-saving benefits, but drivers must weigh these advantages against higher repair and insurance costs. As one analyst noted, “Electric vehicles are the future of mobility, but even a minor scratch today can carry a hefty price tag.”