China's NEV market to get dedicated insurance terms

The Insurance Association of China released a draft of dedicated commercial insurance provisions for the new energy vehicle market for public comment on Aug. 4.

The clause introduces a number of additional insurance policies exclusive to new energy vehicles, including external grid failure loss insurance, self-use charging pile loss insurance, self-use charging pile liability insurance, intelligent assisted driving software loss compensation insurance, fire accident limit doubling insurance, and new energy vehicle value-added service special clause.

Although new energy vehicles are rapidly being accepted by more and more consumers, there has been no exclusive insurance coverage tailored specifically for these models to date. These new provisions are expected to give further support to the development of the industry.

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In contrast to fuel-fired vehicles, new energy vehicle insurance is specifically labeled to include "fire and burn" liability in case of an accident.

The insurance mainly includes new energy vehicle damage insurance, new energy vehicle third party liability insurance, and new energy vehicle occupant liability insurance.

The additional insurance includes an absolute deductible special clause, separate loss of wheels insurance, new equipment damage insurance, body scratch damage insurance, repair period cost compensation insurance, and car cargo liability insurance.

The clause states that the amount of coverage is from 2,000 RMB ($309) to 20,000 RMB, to be negotiated between the policyholder and insurer at the time of application.

The depreciation of electric vehicles for families with less than 9 seats is classified according to the price of the vehicle, and the corresponding depreciation factor is from 0.82 percent to 0.68 percent per month. The depreciation coefficient for plug-in hybrid and fuel cell new energy vehicles is not differentiated by vehicle price, but is 0.63 percent per month.

By the end of June, China's new energy vehicle fleet stood at 6.03 million, accounting for 2.06 percent of the total number of vehicles, according to the Traffic Administration Bureau. In the first half of this year, new energy vehicle registrations accounted for 7.80 percent of new vehicle registrations.