Accidents involving electric vehicles (EVs) can be far more complex and costly to handle than those involving conventional cars and in some cases, the damage can be so severe that the vehicle cannot be repaired at all.
General Insurance Association of Malaysia (Piam) said this reflects new challenges facing the insurance industry as EV adoption accelerates, from higher repair costs to the need for new safety and technical standards.
The strong growth has been driven by import and excise duty exemptions that will end in 2025.
Piam chief executive officer Chua Kim Soon said the rising popularity of EVs, while positive for sustainability, also highlights the urgent need for insurers to adapt to new risks and operational realities.
“EV and hybrid vehicle sales have grown strongly because of duty exemptions, which will end by 2025,” Chua said at a media briefing on the industry’s first-half performance today.
“EV sales alone grew by over 90 per cent in the first half of this year and now make up more than three per cent of total new car sales,” he added.
Chua said EVs differ fundamentally from conventional vehicles, from how they are repaired to how they depreciate, creating a unique risk profile that insurers must adjust to.
Piam has studied data from more mature EV markets such as China to understand how these vehicles perform over time. The findings show that as EVs age, driving habits change, depreciation accelerates and repairs become more complex and costly.
“When there’s an accident in the wrong area of the car, sometimes the vehicle can’t be repaired at all,” he said.
“We need to build a whole ecosystem of battery repair networks in Malaysia and at the moment, it’s still not mature.”
He added that Piam is working with the Road Transport Department to establish standards and compliance requirements for EV workshops, which require specialised skills and strict safety protocols.
“You actually need electrical engineers to fix these cars. A normal mechanic can’t do it and it’s dangerous if done incorrectly,” he said. “So this entire ecosystem has to be built up properly.”
Malaysia is still in a phased liberalisation stage for motor insurance, where pricing remains semi-regulated. This has so far cushioned EV owners from higher premiums.
However, Chua said in more mature and open markets, the cost of insuring an EV is significantly higher due to the greater risks and expenses associated with repairs and parts replacement.
“That hasn’t happened here yet, and we’re trying to manage it so we don’t have to raise premiums. But if you look at other markets, that’s the reality,” he added.
Source: https://www.nst.com.my/business/corporate/2025/10/1289999/some-evs-cant-be-repaired-after-crashes-say-insurers
