High premiums and renewal difficulties: How to solve the insurance dilemma for new energy ride-hailing vehicles?

Reprinted from: Workers’ Daily

In recent years, the number of new energy ride-hailing vehicles has grown rapidly. The Ministry of Industry and Information Technology, the Ministry of Transport, and six other departments previously issued the “Notice on Organizing Pilot Work for Full Electrification of Vehicles in the Public Sector,” which clearly requires that in pilot areas, new energy vehicles account for 80% of newly added city taxis (including traditional taxis and online ride-hailing vehicles).

However, as the industry accelerates its transition to new energy vehicles, it has encountered insurance challenges. Many ride-hailing drivers report that current new energy ride-hailing vehicles not only have premiums several times higher than similar private cars and gasoline vehicles, but also face frequent “renewal difficulties,” with some saying, “Last year I could insure, but this year I can’t renew.” Why are premiums for new energy ride-hailing vehicles so high? Why is renewal so difficult? How can these problems be solved? Our reporter conducted interviews.

High premiums and renewal difficulties lead some drivers to take on risks themselves

“A car bought for just over 100,000 yuan costs about 15,000 yuan in insurance,” said Chongqing ride-hailing driver Mr. Chi. He chose to buy an electric vehicle to save operating costs, but once the insurance quote came in, he realized, “Operating costs aren’t really cheaper than gasoline cars.”

Mr. Chi’s experience is not unique. According to multiple insurance companies, the comprehensive insurance premiums for new energy ride-hailing vehicles generally range from 5,000 to 20,000 yuan, which is 20% to 30% higher than gasoline ride-hailing vehicles of the same class, and 1 to 2 times higher than private cars of the same model. A manager from a Beijing ride-hailing company revealed that the company has more than ten new energy ride-hailing vehicles, with an average annual premium of 13,000 yuan per vehicle, totaling nearly 200,000 yuan in insurance costs annually.

Under the pressure of high premiums, some drivers choose to “bear the risk themselves”: they buy only partial insurance instead of full coverage. A ride-hailing driver in Zhengzhou, Mr. Zhao, drives a “gas-to-electric” converted vehicle, with a full insurance premium of 8,000 yuan. “I only paid 5,000 yuan, insuring only compulsory traffic liability and third-party liability. If I am fully responsible for an accident, I have to pay for repairs myself.”

Besides the high premiums, renewal difficulties are another major concern for drivers. “Our company adopts a phased insurance policy, opening some slots for ride-hailing vehicles to insure this month, then stopping altogether next month. Situations like ‘can insure last year, but can’t renew this year’ are quite common in the industry,” said an insurance manager.

High accident and claim rates drive up premium pricing

Why, despite the increasing prevalence of new energy ride-hailing vehicles as the main model in the industry, do high premiums and insurance difficulties persist? Experts and industry insiders say this is related to the high accident and repair costs associated with new energy vehicles.

Statistics show that the accident rate for new energy vehicles is about 35%, 20% higher than that of gasoline vehicles. The accident frequency for ride-hailing vehicles is even higher than private cars, with a combined claim rate of 130% to 140%.

The high repair costs of new energy vehicles are also a key factor. Wang Guojun, a professor at the Insurance School of the University of International Business and Economics, explained that for pure electric vehicles, the battery accounts for about 40% of the total vehicle cost. After an accident, batteries are very prone to thermal runaway, and single claim amounts can even reach twice that of gasoline cars. “With both high accident and claim rates, insurance companies can only offset the risks through high pricing,” Wang said.

The nature of commercial vehicles combined with the characteristics of new energy models makes new energy ride-hailing vehicles “high risk within high risk.” “The more coverage, the greater the potential loss, so insurance companies will naturally tighten their business,” Wang analyzed. This also reflects systemic bottlenecks in the industry’s risk-bearing capacity: the development of new energy ride-hailing insurance is relatively recent, with insufficient data accumulation and imprecise pricing models, leading to weak actuarial foundations and potential mispricing.

“Insurance companies’ lack of data sharing with vehicle manufacturers and platforms also hampers comprehensive risk assessment,” Wang noted. They find it difficult to access real-time data such as ride-hailing platform order volumes and driving routes, relying only on static indicators like vehicle age and accident history, which makes comprehensive risk evaluation challenging.

Seeking solutions for the risk scenarios of new energy ride-hailing vehicles

“Breaking through the insurance difficulties for new energy ride-hailing vehicles requires technological innovation,” Wang suggested. Using big data technology, integrating vehicle CAN (Controller Area Network) data, ride-hailing platform order data, and traffic violation records, can help build a three-dimensional risk profile for vehicles, enabling insurers to more accurately assess risks.

“In terms of pricing mechanisms, existing Usage-Based Insurance (UBI) technology can already collect data such as braking frequency and nighttime driving proportion through onboard devices, allowing for personalized insurance rates,” Wang said. He emphasized that further promotion of these insurance technologies’ application is necessary. Especially for new energy ride-hailing vehicles, establishing reinsurance funds for commercial vehicles and enacting regulations for data sharing among insurance platforms are crucial.

“As the ride-hailing market expands, the insurance industry should develop specialized product systems and service standards tailored for this group, providing ride-hailing drivers with customized insurance services,” Wang recommended. For risk scenarios specific to new energy ride-hailing vehicles, he suggested adding coverage for battery puncture and water immersion in battery protection insurance; exploring a “basic premium + variable premium” model that adjusts premiums based on mileage and order volume.

“Under current legal frameworks, establishing special provisions for ‘new energy commercial vehicle insurance’ is not only necessary but urgent,” said Lu Fenghao, a practicing lawyer at Henan Shiding Law Firm. Relevant authorities should actively promote amendments to insurance laws and related regulations, develop specific insurance management measures for ride-hailing risks, and standardize insurance contract clauses.