New Car Insurance: Beyond Protection – A Strategic Decision in the Age of Electric Cars and Smart Tech
In 2025, as electric vehicles (EVs) surpass traditional gasoline cars in global sales, car buyers are faced with a decision that goes beyond brand, configuration, and range. They must also focus on an often-underestimated yet crucial aspect of their purchase: new car insurance.
Many consumers rush to choose an insurance policy the moment they drive off the lot, only to discover, over the next 3 to 5 years, that their policy doesn’t fully cover certain risks, leaving them to bear significant losses that could have been avoided.
With the rise of electric vehicles, smart driving technologies, and an increase in urban accidents, the traditional logic behind car insurance is quickly becoming outdated. The need for a re-evaluation of new car insurance is more urgent than ever.
In the first half of this year, new energy vehicles (NEVs) accounted for 67% of all new vehicle registrations in China, with 5.65 million vehicles insured. However, the claims ratio for EVs has proven significantly higher than that of gasoline vehicles, especially in congested urban areas where minor collisions are more frequent. According to data from China Insurance Research Institute, the claim ratio for EVs in the first 1–2 years is 18% higher than that for traditional cars.
Moreover, when advanced technologies like Level 2 autonomous driving systems are damaged, repair costs can quickly exceed expectations, and many insurance companies exclude these from coverage or impose restrictions, leaving many car owners in a difficult situation.
For instance, a customer in Hangzhou who bought a Li Auto L8 encountered two low-speed collisions within six months. The front radar was damaged, and although the damage was minor, the replacement and calibration cost nearly ¥10,000, but the insurance company only paid part of the cost based on the standard policy, leaving the car owner to cover the remainder.
This highlights a significant problem: Many so-called “comprehensive” new car insurance plans do not truly cover the specific vulnerabilities of electric vehicles, nor do they account for the typical urban driving scenarios faced by many consumers.
To avoid these risks, car buyers must go beyond simply “buying insurance” and learn how to “choose the right insurance.” Leading insurance providers have begun offering specialized plans for EVs, such as People’s Insurance's “Battery Extension Insurance” and Ping An’s “Smart Driving System Failure Insurance,” signaling a shift in the industry's risk models.
However, these products often come with numerous conditions, such as requiring repairs at authorized dealerships or the uploading of driving behavior data, increasing privacy risks and complicating decision-making.
At the same time, with younger consumers becoming the dominant force in car purchasing, new car ownership models like "lease-to-own," "financing leasing," and "subscription-based car usage" are gaining popularity, blurring the boundaries between vehicle ownership and insurance responsibility.
Many platforms default to the minimum compulsory traffic insurance and car damage insurance, leading users to assume that the insurance is sufficient. In reality, issues like insufficient third-party liability coverage or the lack of glass coverage often result in car owners needing to pay substantial out-of-pocket costs after an accident.
Thus, new car insurance decisions are no longer merely about compliance; they are becoming a “value management strategy.” Understanding insurance is now considered a “basic skill” for modern car owners.
From a data perspective, China’s urban per capita car ownership has surpassed 35 cars per 100 people, while the growth rate of urban road infrastructure is under 3%. This indicates that the future driving environment will become more complex, with increased frequency of incidents like parking scrapes, intelligent braking system errors, and extreme weather-related accidents.
A deeper shift is also occurring in consumer behavior, as many families begin viewing car insurance as a "risk-shifting tool." They are no longer only concerned with the safety of their own vehicles but also want to ensure that, in the event of an accident, they can quickly compensate the other party to avoid legal disputes, family conflicts, and even secondary harm to community safety.
This has led insurers such as Pacific Insurance and ZhongAn to introduce "responsibility scoring systems," using driving behavior, claims history, and repair records to quantify a car owner’s “shared road risk” and develop differentiated premium strategies. Although this shift is still in its early stages, it is expected to become a mainstream practice that promotes overall road safety and encourages lawful driving in the future.
“I’m not sure which coverage I should get? What’s a reasonable amount to pay? Is the insurance offered by the platform enough?” These questions, which once were dealt with hastily after purchasing a car, have now become core concerns in the car buying process.
The ideal new car insurance, which adapts to future travel trends, must meet three key criteria: broad coverage (covering the unique risks of EVs and high-frequency urban driving scenarios), high flexibility (supporting multiple platforms, scenarios, and ownership responsibilities), and strong risk control (using driving data and AI to achieve dynamic pricing and efficient claims processing). From this perspective, new car insurance is no longer just a “safety net” – it’s a strategic tool for managing family assets, adapting to societal changes, and making rational travel decisions.
As we move toward 2025, with the rise of electric vehicles, smart technologies, and complex urban environments, it’s essential for each of us to redefine the role of insurance in our lives to effectively navigate the future.