UAE EV Insurance Costs Soar as Premiums Exceed Petrol by Over 70%

Electric vehicle insurance policies in the UAE are commanding about 72 per cent higher premiums than those for comparable petrol or diesel cars, largely because of elevated repair costs, limited workshop capacity, and parts supply chain challenges. Such figures, derived from data compiled by leading insurance and automotive analysts, shed light on systemic pressures across the market.

Average comprehensive EV insurance is being priced at approximately AED 4,992 annually, whereas for internal combustion engine vehicles of similar body types, premiums average AED 2,895. These marks underscore the gap consumers face in insuring EVs under current conditions.

Insurance market executives point to three main drivers behind the disparity. First, the cost to repair EVs is substantially higher: battery packs, advanced driver assistance system sensors, and bespoke structural components raise both parts and labour expenses. A full battery replacement can run into tens of thousands of dirhams.

Second, the supply chain remains constrained. Many EV parts are VIN-specific and require international sourcing, which results in both higher shipment expenses and longer lead times. Delays in obtaining certified components tend to drive up downtime and the overall cost risk borne by insurers.

Third, repair facilities certified for EV work are limited. Not all workshops have the specialised diagnostic tools or personnel trained in high-voltage systems and battery diagnostics. This scarcity means insurers must account for longer repair turnaround and often higher contractor rates when appointing certified repair specialists.

Experiences elsewhere mirror the UAE’s: in the United States, EV insurance premiums often run about half again as high as those for petrol equivalents. In China, regulators intervened early to set underwriting standards specific to EVs and build up certified repair workshop networks, helping compress the cost gap.

Market analysts are observing early signs that the differential may gradually narrow. High-volume EV models—those with more claims history—are seeing stabilisation in premiums as insurers accumulate more data. Innovations such as usage-based insurance, telematics, battery-age clauses, and partnerships with authorised dealers are being rolled out to better align risk with pricing.