Dubai - For the first time in over a year, electric vehicle (EV) owners in the UAE are seeing a meaningful decline in motor insurance costs, with renewal rates falling by as much as 9.5%.
According to data from InsuranceMarket.ae, average renewal premiums dropped to Dh5,270 in Q3 2025, compared with Dh5,815 in Q2 and Dh5,437 in Q1. Industry experts say the correction reflects insurers’ deeper understanding of EV risks and a broader mix of models entering the market.
“What started with traditional EV brands like Tesla has now expanded to include Chinese manufacturers,” said Avinash Babur, CEO of InsuranceMarket.ae. “The wider mix is driving diversity in premiums, making policies more competitive.”
Dealers, who had long raised concerns about high insurance costs dampening EV demand, welcomed the drop. Many buyers had faced steep premiums after free coverage expired in the first year, especially following the surge in claims linked to last year’s floods.
Still, some challenges remain. While EV adoption is rising, particularly with Chinese brands offering longer warranties and after-sales support, experts note that insuring these vehicles can still cost up to 4.5% of the car’s value annually, higher than for conventional vehicles. Analysts warn that continued disparities could trigger regulatory intervention to standardize underwriting practices.
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