The money saved on fuel when purchasing a new energy vehicle may be entirely offset by the higher insurance premiums.

In 2026, a BYD Dolphin owner shared her insurance renewal bill, revealing a second-year premium of 6,800 yuan. In contrast, her colleague's similarly priced gasoline-powered car had a premium of only 3,200 yuan.

Despite similar car prices, the insurance premiums differed by more than double.

This is not an isolated incident.

Data released jointly by the China Association of Actuaries and China Banking and Insurance Information Technology in March 2026 indicated that the average annual premium for pure electric vehicles at the same level is 15% to 20% higher than that for gasoline-powered vehicles.

For mainstream home-use electric vehicles priced between 100,000 and 200,000 yuan, the annual premium is consistently 1,200 to 2,000 yuan higher. For the 200,000 yuan category, the gap is the largest, with an annual difference of about 2,500 yuan.

For some high-performance models with high parts-to-vehicle price ratios, the premium increase can reach 20% to 30%. There are even cases where the premium for a 200,000 yuan electric vehicle is comparable to that of a 500,000 yuan gasoline-powered vehicle, a phenomenon known as premium inversion.

01 Why Are New Energy Vehicle Insurance Premiums So High?

The primary reason for the high insurance premiums of new energy vehicles is the expensive repair costs.

First, integrated die-casting turns minor damage into major repairs.

Traditional gasoline-powered vehicles have bodies made up of multiple welded parts, allowing for individual replacement of damaged components. New energy vehicles, to reduce weight and increase range, extensively use integrated die-casting technology, with the entire rear body cast in one piece.

The advantage is fewer parts and a lighter body, but the downside is that damage to one corner may require replacing the entire rear body. Maintenance costs can soar from a few thousand yuan to tens of thousands yuan.

Second, battery packs are fragile.

The latest data released by the China Insurance Automotive Safety Index in September 2026 showed that the average parts-to-vehicle price ratio for power batteries in pure electric vehicles is 44.17%, a decrease of 5.42 percentage points from the previous period.

This means that the cost of replacing a battery averages more than 40% of the vehicle's selling price, and for some models, it exceeds 90%.

Battery packs are located in the chassis, the most vulnerable area to impacts. Once damaged, the standard procedure at 4S dealerships is often to replace the entire pack rather than repair it.

Third, smart hardware is expensive to repair.

Laser radars, millimeter-wave radars, and high-definition cameras are scattered across the vehicle body. A single laser radar can cost tens of thousands of yuan, and with calibration fees, the repair cost for one unit can exceed 9,000 yuan.

One owner damaged the rear bumper while reversing, which also damaged the millimeter-wave radar inside, resulting in a repair quote of 18,000 yuan.

Fourth, repair channels are monopolized by 4S dealerships.

The core technologies and parts of new energy vehicles are controlled by automakers, and third-party repair shops cannot obtain original parts or repair authorizations. Vehicle owners have no choice but to accept the pricing set by 4S dealerships.

02 Are Insurance Companies Now Profitable?

In the past few years, new energy vehicle insurance has indeed been a loss-making business for insurance companies.

In 2025, the industry underwrote 43.58 million new energy vehicles, with premium income of 190 billion yuan. However, the overall industry incurred underwriting losses of 5.6 billion yuan, with 143 vehicle models having a loss ratio exceeding 100%.

However, by the first half of 2026, the situation improved.

The combined cost ratios for vehicle insurance at the three leading companies—PICC Property and Casualty, Ping An Property & Casualty Insurance, and China Pacific Property Insurance—all fell to around 95%, achieving underwriting profitability. PICC Property and Casualty had a combined cost ratio of 94.5%, China Pacific Property Insurance 95.0%, and Ping An Property & Casualty Insurance 95.1%.

It should be noted that these are the overall combined cost ratios for vehicle insurance at these three companies, not solely for new energy vehicle insurance.

However, this does not mean that premiums will immediately decrease.

Leading insurers have achieved profitability through data accumulation, risk control models, and repair networks. However, small and medium-sized insurers generally lack historical claims data, have weak bargaining power, and find it difficult to control maintenance costs, with many still incurring underwriting losses.

03 Regulators Have Taken Action

In January 2025, the National Financial Regulatory Administration, the Ministry of Industry and Information Technology, the Ministry of Transport, and the Ministry of Commerce jointly issued the Guidelines on Deepening Reforms, Strengthening Regulation, and Promoting High-Quality Development of New Energy Vehicle Insurance (Jin Fa [2025] No. 4).

This is China's first set of guidelines on new energy vehicle insurance, which clearly states:

Promote the reduction of maintenance costs and enrich the supply channels and types of maintenance parts for new energy vehicles.

Guide automakers to open necessary maintenance data and technical authorizations to insurance companies.

Study and explore new products such as vehicle insurance for the 'vehicle-battery separation' model.

In September 2026, the National Financial Regulatory Administration issued another document, requiring insurance companies not to set unreasonable underwriting restrictions for new energy vehicle insurance or to refuse coverage without cause.

04 What Can Ordinary People Do?

First, check the insurance premium before buying a car.

The difference in premiums between different models may exceed your imagination. For a 200,000 yuan car, some premiums are 4,000 yuan, while others are 7,000 yuan. Ask clearly before buying to avoid regrets when renewing the policy.

Second, choose models with lower maintenance costs.

Models with fewer integrated die-cast parts, fewer laser radars, and battery packs that can be repaired separately generally have lower premiums.

Third, drive safely and avoid claims.

For new energy vehicles, a single claim can lead to a significant increase in the next year's premium. For minor scratches with repair costs under 1,000 yuan, paying out of pocket may be more cost-effective than filing an insurance claim.

Fourth, pay attention to the implementation of the vehicle-battery separation model.

This model separates the insurance for the vehicle body and the battery. As the vehicle body's value decreases, the premium burden is expected to ease. Long Ge from the University of International Business and Economics estimates that the reduction in commercial insurance premiums paid by consumers could reach 15% to 30%.

New energy vehicles save on fuel but not on money; the insurance premium is the often-overlooked cost.

Next time someone tells you that electric vehicles cost only a few cents per kilometer, you can reply: What about the insurance premium?

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