Thailand: First official battery electric vehicles insurance policy

In brief

With an increasing market demand, the Office of Insurance Commission (OIC) now prescribes standard wording and premium rates for battery electric vehicles (BEVs). This marks the first time that the OIC has formally recognized insurance policies for BEVs.

In more detail

1. Enforcement

The Registrar Order No. 47/2566 ("Registrar Order") on BEVs requires all insurance policies for BEVs concluded from 1 January 2024 to have standard wording and apply a premium rate in accordance with the order.

However, the Registrar Order provides a grace period of five months, allowing insurers until 31 May 2024 to comply with the order.

2. Applicability

Only insurance policies for BEVs are regulated by the Registrar Order. Policies for electric vehicles that are converted from vehicles using internal combustion engines and hybrid vehicles do not fall within the scope of the order.

3. Key differences from traditional motor insurance

3.1. Coverages

The coverage prescribed for BEVs under the Registrar Order policies is generally similar to that of traditional motor policies.

Notable exclusions include damages resulting from a cyber breach, such as a BEV that is out of control due to a cyber breach, resulting in a collision and subsequent damage.

BEV insurance policies typically do not cover the loss or damage of chargers (except portable chargers supplied by the BEV manufacturer). However, the insured can purchase an additional rider to cover damage to the chargers.

3.2. Battery

The Registrar Order gives a clear depreciation rate for BEV batteries to determine the maximum compensation in case of damage to the BEV batteries.

The Registrar Order further stipulates the allocation of sale proceeds between the insured and the insurers. This allocation is proportionate to the percentages specified in the table above in the event that the BEV battery is later sold. Additionally, there is an option for an additional rider to cover the full cost of BEV battery replacement.

3.3. Drivers

While driver designation is voluntary for traditional motor insurance, it is mandatory for BEV policies. Up to five drivers can be listed per vehicle. This requirement stems from the difference between how premiums are determined in traditional versus BEV motor insurance. A change in premiums for BEV policies is based on the driver's behavior while a change in premiums for traditional policies is based on claim history of the vehicle. Under the Registrar Order, the driver with the worst driving habits will be the base of premium increase or discount calculation.