EV drivers seek clarity as insurers push for higher premiums

Electric vehicle (EV) drivers are calling for greater clarity over a proposed 20 to 30 per cent increase in motor insurance premiums, questioning what has changed to justify higher charges when expensive repairs and the limited availability of spare parts have long been challenges for motorists. The concerns come as insurers push for a review of motor insurance tariffs, citing rising repair costs, increasing claims and higher compensation payments. Drivers, however, say they need a clearer explanation of why the adjustment is necessary now and how it would affect their already high operating costs. Jean Aime Ngabonziza, an electric motorcycle taxi operator, said the cost and limited availability of spare parts have long affected operators, sometimes forcing them to remain out of work for weeks while waiting for repairs. “Sometimes the motorcycle breaks down and you have to wait two weeks. During that time, you are not working,” he said. Ngabonziza, who pays Rwf182,000 annually to insure his electric motorcycle, said the proposed increase would add to the financial pressure on operators who depend on their motorcycles for daily income. However, he questioned why premiums should rise without a clear explanation of what has changed. “If they want to increase the prices, they should first explain clearly why and what has changed to justify the increase, because expensive spare parts are not a new problem,” he said. ALSO READ: Rising repair costs, claims push insurers to review motor premiums Why insurers want higher premiums Andrew Kulayige, Chairperson of the Rwanda Insurers Association (ASSAR), told The New Times that vehicle repair costs had more than doubled over the past four to five years, while motor insurance tariffs had remained unchanged for at least five years. He cited the rising cost of imported spare parts and foreign exchange fluctuations among the factors putting pressure on insurers, including the cost of repairing electric vehicles. According to insurers, increasing claims, medical expenses and compensation payments to road accident victims have also contributed to the need for a review of existing premiums. The proposed increase remains under discussion between ASSAR, the Ministry of Finance, the National Bank of Rwanda and other stakeholders. The final rates and implementation date have not yet been agreed upon. While insurers maintain that higher premiums are necessary to keep pace with rising costs, EV drivers want to understand how the proposed adjustment has been calculated and whether it adequately considers the financial pressures motorists already face. Drivers raise concerns over affordability Gervais Murekezi, a private taxi driver who uses an electric car, said the shortage of spare parts remains a major challenge for EV owners, particularly when vehicles require components that are not readily available on the local market. He cited side mirrors and headlights among the parts that sometimes have to be imported, making repairs both expensive and time-consuming. “Using these vehicles can be difficult because you look for spare parts and fail to find them. Apart from being expensive, they are not readily available,” he said. Murekezi explained that replacement costs vary depending on the vehicle model and year of manufacture, while the technology used in some components can make repairs more complicated. He currently pays Rwf1.7 million annually for insurance through Radiant Insurance. According to him, his policy covers replacement parts when his vehicle is damaged, subject to the terms of the insurance agreement. Murekezi said he has paid insurance premiums for five years without being involved in an accident or making a claim, raising questions about the prospect of paying more despite his claims-free record. His concerns also draw attention to whether motorists' individual claims histories are taken into account when determining insurance premiums. ALSO READ: Insurance: Are ever-soaring motorcycle premiums justifiable? What makes EV repairs expensive? While drivers are seeking explanations for the proposed increase, automotive industry players acknowledge that repairing electric vehicles can be costly, particularly when replacement parts must be imported. Zhou Wenchen, Executive Director of CarIn Motor Ltd, an automotive business operating in Kigali, said the cost of replacing damaged EV components can rise substantially because of import charges, shipping expenses and the urgency with which customers need the parts. He cited the example of a BYD battery that costs approximately Rwf5 million in China but can reach Rwf7 million by the time it arrives in Rwanda, excluding installation and servicing. “A single medium tyre can cost around Rwf500,000 upon arrival when shipped by sea, a process that can take up to seven weeks. The price excludes fitting and other service charges,” he said. Wenchen cited import charges of 28 per cent and value-added tax (VAT) of 18 per cent, alongside transport expenses, as factors that can increase the final cost of spare parts. He explained that shipping methods also have a significant impact on prices. Sea freight is generally cheaper but can take at least seven weeks, while sourcing and delivering larger components may take up to three months in some cases. Air freight offers faster delivery but is considerably more expensive, particularly for bulky parts such as vehicle doors. Wenchen cited a replacement door that could cost around Rwf3 million when sourced urgently through an insurance claim, compared with approximately Rwf2.4 million if ordered directly from China and the customer is willing to wait. He said air freight charges alone for a large component could exceed Rwf2 million. “Sometimes customers don't care about the price. They want it now,” he said. He explained that motorists whose vehicles are out of service may opt for more expensive delivery arrangements rather than wait several weeks for replacement parts, particularly when the vehicle is their source of income. According to Wenchen, the price of a component also depends on whether it is already available locally or must be ordered from the manufacturer. Technology adds to replacement costs Beyond shipping and import expenses, Wenchen said the electronic systems used in some electric vehicles can make certain repairs more complex and expensive. Components such as side mirrors and vehicle keys may be connected to a vehicle's electronic systems, requiring specialised programming rather than simply fitting a replacement. For instance, duplicating a vehicle key when the owner still has a functioning one can cost between Rwf300,000 and Rwf400,000. However, when all keys are lost, the supplier may need to contact the manufacturer in China to obtain the information required to programme a replacement. Wenchen estimated that the process can cost between $600 and $700, depending on the circumstances. He said the combined effect of import charges, transport delays, urgent delivery costs and specialised electronic systems makes EV repairs expensive, with the final bill depending on the component required and how quickly the customer needs the vehicle returned to service. ALSO READ: Minister Nsabimana blames low motor-cycle insurance cover on high premiums Calls for clearer justification Although motorists acknowledge that vehicle repairs can be expensive, they argue that the costs alone do not sufficiently explain the timing of the proposed insurance premium increase. Their concerns centre on what has changed in the insurance market, how the proposed adjustment was determined and whether the new rates would reflect the different circumstances of motorists, including those who have not made claims. For insurers, the proposed review is intended to ensure they can continue meeting legitimate claims as repair costs, medical expenses and accident compensation payments rise. However, with discussions still ongoing, EV drivers say greater transparency over the proposed rates and the factors behind them would help motorists understand the need for any adjustment. The final premium rates and the date on which they could take effect remain undecided.

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EV drivers seek clarity as insurers push for higher premiums