Electric Vehicle Insurance Premiums in UAE: Challenges and Opportunities

Electric vehicle insurance premiums in the UAE are 72% higher than for petrol cars, driven by costly repairs and limited service centers. Despite this, EV adoption is rising rapidly due to improved affordability, expanding infrastructure, and stronger resale values. The market is expected to stabilise as insurers adopt data-driven models and partnerships streamline repair and claims processes. Electric vehicles (EVs) in the UAE are gaining significant traction, but their insurance premiums remain substantially higher than those of petrol cars averaging 72% more. This cost disparity, driven by repair complexities and flood related damages, presents challenges in a rapidly expanding EV market backed by rising sales, infrastructure development, and growing consumer interest. The average annual insurance premium for electric vehicles in the UAE has reached approximately AED 4,992, compared to AED 2,895 for petrol or diesel cars. This 72% gap is primarily due to higher repair costs, particularly for specialised components like batteries, which often require international sourcing and limited local repair expertise. Speaking to The National, Hitesh Motwani, deputy CEO of insurancemarket.ae, explained that specialised components such as EV batteries often require international shipping, and the limited number of repair centres in the UAE is driving up claim expenses. The April 2024 floods exacerbated these issues, causing widespread battery failures and adding further pressure on insurers. As the EV sector matures, insurance pricing is expected to evolve, with data-driven models that consider factors like battery condition, charging habits, and vehicle technology. Insurers are also beginning to work more closely with authorised repair networks to streamline claims and reduce long-term costs.