Electric Car Insurance Market Size, Share, Growth, and Industry Analysis, By Type (Principal Insurance & Additional Insurance), By Application (Plug-in Hybrid Vehicle, Battery Electric Car & Fuel Cell Vehicle), and Regional Forecast to 2032

Electric car insurance market overview

The global electric car insurance market size was USD 4.231 billion in 2023 and is projected to touch USD 23.26 billion by 2032, exhibiting a CAGR of 18.7% during the forecast period.

Electric Vehicle Insurance is changing significantly around the world due to the near-continuous acceptance of electric vehicles (EVs). This makes these vehicles greener and has direct government incentives. Insurers are working on plans that hold strong prospects for the future. These include policies on battery replacement, protection against damage to the charging infrastructure, and cost of repairs from specialized service providers. The market is predicted to grow larger as soon as EV technology becomes more common, making it a good place for insurers to devise novel ways of handling that growing segment. Also, with the increased concentration on sustainable practices all over the world, it creates a scenario where there will often be demand for specific insurance products for EVs.

Global crises impacting the electric car insurance marketCOVID-19 IMPACT

Pillow-shaped Aseptic Packaging Material Industry Had a Positive Effect Due to the COVID-19 Pandemic

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to the market’s growth and demand returning to pre-pandemic levels.

However, according to gradual assessment reports, the electric car insurance market is expected to experience substantial expansion profits after a phase of stunted growth due to reduced vehicle usage and overall lower sales of new cars during the COVID-19 pandemic. Emerging from the crisis, the automobile industry's most potent impetus has been government green recovery strategies to stimulate consumer demand. Incentives for purchase were generally in favor of electric vehicles and translated to increased demand for electric car insurance. Insurers have fine-tuned their innovations, branding products like "usage-based insurance (UBI)," responding to a major shift in the consumer turn caused by the pandemic. The to-now resistance and buoyancy of the market were seen through these tumultuous economic times.

LATEST TREND

"Emerging telematics technology drives global team-building service growth."

One of the most interesting trends seen in electric car insurance is the emerging telematics technology. It is the process by which insurers can track driving behaviors such as speed, braking, and mileage through onboard devices or smartphone applications. Then this information is used to provide customized and usage-based insurance (UBI) plans that offer savings on premiums for safe drivers. For the same reasons, telematics have become very popular with EV owners, as they drive less frequently and much more safely. This then means that not only for insurers, providing proper risk assessments and truly transparent, cost-effective policies will set them well on the course for thoroughgoing adoption of telematics-derived insurance schemes.

Electric car insurance market segmentation

BY TYPE

Based on type, the global market can be categorized into principal insurance and additional insurance.

• Basic Insurance: Principal Insurance is compulsory basic coverage for electric vehicles. Thus, it takes care of third-party liabilities, collision damages, or theft. It ensures that users completely enjoy protection from any unspecified situations. Principal insurance remains the most popular category, offering all insurance agencies the best boosts with something more on the lines of EV-specific features such as charges for damage to cables and stations.
• Additional Insurance: Thus, this guarantees that the car covers much beyond mandatory requirements, such as a pricey new battery, damage to the charging station, and even roadside assistance for peculiar situations like charging. As the demand for EVs increases and the market starts opening, the number of people requiring these kinds of policies will also increase, especially for high-end EV owners desiring maximum extra protection.

BY APPLICATION

Based on application, the global market can be categorized into Plug-in Hybrid Vehicle, Battery Electric Car, and Fuel Cell Vehicle.

• Plug-in Hybrid Vehicles: Plug-in Hybrid Vehicles (PHEVs) are those vehicles that rely on an internal combustion engine coupled with electricity. This fact requires the different insurance policies, as both combustion and electrification-related coverage are included. Insurance companies are coming up with hybrid-specific policy designs to meet the changing facts on consumer inclination about these transition vehicles.
• Battery-Electric Car: The prime battery in the battery-electric cars accounts for the expensive component of these vehicles since the motor works entirely on electricity. Therefore, the insurance for battery electric vehicles generally tends to focus on insuring the battery degradation replacement and the charging infrastructure, as battery electric vehicles cover an extensive map of the electric vehicle marketplace. Therefore, insurance companies have wasted no time in starting to innovate policy schemes that are set to prioritize this segment.
• Fuel Cell Vehicle: Importantly, many hydrogen-powered fuel-cell vehicles (FCVs) gaining traction in the EV insurance space require completely new policies with regard to hydrogen systems' safety and fuel storage, and prohibitively high repair costs associated with both. Though an extremely limited segment as of now, FCVs would constitute a meaningful section of volume in terms of insurance requirements as acceptance grows.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities, and challenges stating the market conditions.

DRIVING FACTOR

"Movement-enabling driving and government funding fuel growth."

The movement enabling driving is one of the critical drivers of the electric car insurance market's growth. Increasing subsidies from governments as well as vehicle manufacturers for the installation of charging networks in various localities gives rise to an increased number of EVs on the roads. However, this growth in EVs also necessitated customized and unique insurance, which would cover some risks that are new and potentially unique in today's age, such as battery protection. Indirectly, the electric car insurance market has also seen funding from incentive policies, including tax benefits and grants related to the purchase of electric vehicles. So, it also drives the demand of many governments that would activate their insurance system with reforms to be able to meet EV-specific requirements while spurring insurers to incorporate creativity in innovation through developing new policy frameworks on these household vehicles.

RESTRAINING FACTOR

"Higher costs of repairs raise costs and sustainability concerns."

The biggest restraint in the electric car insurance market is the higher cost of repairs and replacement of various parts in an EV, with battery replacement being one of them. EV batteries, which are a big part of the car value itself, are expensive to replace or even to repair in case of damages; the nature of repair services for EVs being specialized upsurges the costs. All these make repairs costly, and high repair expenses translate directly to expensive premiums, which most average consumers would not be able to afford for comprehensive coverage.

OPPORTUNITY

"Urbanization and increased environmental consciousness boost market growth."

There is a hugely promising opportunity for electric car insurance market growth within emerging markets in Asia, Latin America, and Africa. Within these regions, urbanization and increased environmental consciousness, as well as government incentives, spur the adoption of EVs. Furthermore, affordable, truly market-specific EV models have expedited that trend. Despite very little infrastructure in place at present, current charging network developments and their subsidies put a much more favorable environment in place for EV expansion.

CHALLENGE

"Unawareness and uneconomic interest of the consumers hinder market growth potential."

The foremost challenge that the electric car insurance market is facing lies in the unawareness and uneconomic interest of the consumers regarding the electric vehicle-specific policies. Many consumers with EV ownership still choose to have generic car insurance policies, which don't cover particular risks, such as battery replacement, charging infrastructure damage, or specialized repair services, which have little or no specific insurance protection. This knowledge gap constricts the uptake of tailor-made EV insurance products and keeps creation at bay from certain markets, especially in emerging EV markets.

Electric Car Insurance Market Regional Insights.

• North America

North America has the highest share of the worldwide electric car insurance market, spurred on by soaring adoption rates of EVs, a well-developed infrastructure for charging, and a mature insurance situation. The United States Electric Car Insurance market is quite important and counts numerous top providers planning collaborations with automakers for developing new policies particularly meant for the owners of electric vehicles. Leading the way in the United States are innovative solutions such as telematics-based use-based insurance that serves the distinct needs of consumers in the region who drive EVs.

• Europe

Europe is an essential spearhead toward the future of electric car insurance markets since strict emission regulations coupled with aggressive government initiatives are promoting mass adoption of the EV. Some of these countries include Norway, Germany, and the United Kingdom; together, they are among the countries with the highest EV penetration rates in the entire world. By aligning with the continent's sustainability objectives, European insurers are focusing on innovative green insurance policies, one of which is that that offers comprehensive battery protection and home charging station insurance, which have become so popular among consumers in Europe.

• Asia

Electric vehicle insurance market share is projected to be a high-potential emerging market in Asia because of its dominance in electric car production and sales regionally. Among the major countries driving this growth is China, through its active government support and rapid expansion of EV infrastructure. Japan and South Korea cannot also be left out since such market players have established their advanced technologies and innovative processes when it comes to manufacturing or producing electric cars. Insurance companies are taking advantage of high technology in the region to provide cost-efficient and technology-driven policies to meet the differing needs of many consumers.

Key industry players

"Key industry players drive global team-building service growth through innovation."

Industry leaders such as Drake Kustoms, RIDEOFY, Vardenchi, Puranam Design, and Gemka Industries are revolutionizing the entire electric car insurance market with their innovations and strategic partnerships from every possible angle. Telematics and AI technologies are also in use by these companies for creating insurance solutions tailored for the specific needs of customers with electric vehicles. The companies are vying to offer an excellent customer experience addressing the peculiar needs that these EVs bring forth, like battery replacement and charging station coverage. This is what contributes to shaping market dynamics.

LIST OF TOP B2B INFORMATION SERVICES COMPANIES

• Allianz (Germany)
• Zurich (Switzerland)
• State Farm (United States)
• Assicurazioni Generali (Italy)
• Ping An (China)

Key industry development

"Key industry developments enhance electric car insurance market growth through innovation."

January 2021: This innovative policy used real-time driving data to determine premiums and rewarded low-cost premiums for safe drivers. Such policies will require the advent and application of new-age technologies to address consumers' issues, such as affordability and transparency in the pricing of insurance on electric motorcycles. All these advantages just set new standards in the industry as far as developments have to do with electric vehicle insurance. Copious examples can now be sighted to stand for technology-driven solutions changing the market for electric car insurance and letting the gates open for more in other segments.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

This research report examines the segmentation of the market by using both quantitative and qualitative methods to provide a thorough analysis that also evaluates the influence of strategic and financial perspectives on the market. Additionally, the report's regional assessments consider the dominant supply and demand forces that impact market growth. The competitive landscape is detailed meticulously, including shares of significant market competitors. The report incorporates unconventional research techniques, methodologies, and key strategies tailored for the anticipated frame of time. Overall, it offers valuable and comprehensive insights into the market dynamics professionally and understandably.