Industry watchers are predicting that premiums for electric vehicles (EVs) will be 10% lower than gasoline or diesel-powered vehicles, when the the Korea Insurance Development Institute (KIDI) reveals its reference net premium rates for electric cars by the end of this month.
The reference premium rate will be based on the Institute’s analysis of EV accident statistics and the loss ratio for insurers, to be used by smaller insurance companies that lack the resources to independently derive this type of data, reported Korea Bizwire.
In an earlier study, conducted on behalf of the Ministry of Trade, Industry & Energy, the KIDI concluded that EVs are in fewer, less severe, traffic accidents due to relatively shorter trip distances, and travel that is limited predominantly to major cities with access to charging facilities, suggesting that insurance rates should fall roughly 10% lower than conventional vehicles.
Currently, a handful of insurers, including Hyundai Marine & Fire Insurance, Dongbu Insurance, and Samsung Fire & Marine Insurance, offer EV-specific premiums, most of which are already more affordable than existing car insurance rates.
As of April, South Korea had 14,063 officially registered EVs, accounting for 0.06% of all vehicles in the country. The South Korean EV market is quickly gaining momentum. Last year, 5,914 electric vehicles were newly registered, tripling the 2015 figure of 2,907, and six times the 1,075 recorded in 2014.
The Ministry of Environment also pledged to increase the number of EVs to 250,000 by 2020, making bold investments in building charging facilities across the country, and providing subsidies for EV purchases.