There has been speculation online that electric vehicles (EVs) pose a major fire risk and that insurance companies may refuse to cover damages if an EV catches fire at home or inside a building car park.
However, the General Insurance Association of Malaysia (PIAM) says standard fire insurance policies generally still apply regardless of whether the fire was caused by an EV, a petrol-powered vehicle or other electrical sources.
The clarification was shared during PIAM’s media briefing event held yesterday, during a media Q&A session following the release of its 2025 general insurance industry performance report.
“A fire is a fire”, whether it involves a petrol car or an EV
Speaking during the session, PIAM CEO Chua Kim Soon said fire insurance coverage is based on the fire incident itself, and not specifically the type of vehicle involved.
“So fire is a fire. It goes through the same phase, whether it is caused by an EV or caused by a short circuit. So if you have a fire policy protecting the building, then if there’s a fire even from an EV, that’s being covered. You need to make sure that the value for the building is adequately insured,” he said.
Are EVs actually more likely to catch fire?
PIAM also addressed concerns about whether EV ownership increases fire exposure risks.
According to the association, available data and statistics do not indicate that EVs have a higher fire risk compared to petrol or diesel vehicles. In fact, PIAM said ICE vehicles currently present a higher fire exposure risk than EVs.
The association also acknowledged that vehicle technology is evolving rapidly with electrification, digitalisation and autonomous systems reshaping motor risk profiles.
In fact, Malaysia’s Fire and Rescue Department (BOMBA) has also stated that the risk of fire in EV is far lower than combustion vehicles. The department’s Director-General Datuk Seri Nor Hisham Mohammad cited data from the United States and Europe, which showed that EVs catch fire less frequently than gasoline-powered cars.
He said there were 1,530 fires per 100,000 gasoline vehicles (1.53%) and 3,475 fires per 100,000 hybrid vehicles (3.48%). Meanwhile, there were 25 fires per 100,000 EVs (0.025%).
PIAM added that the insurance industry is actively assessing these developments, including findings from the 2025 Malaysian Claims Analytics Study published on 24 April 2025.
That said, EV battery fires can be more complex to extinguish once they occur, which is why fire departments and building operators are increasingly updating safety procedures and emergency response protocols for EV-related incidents.
PIAM: Fire insurance remains a profitable and growing segment
According to PIAM’s latest industry report, fire insurance remained one of the strongest-performing business segments for Malaysia’s general insurance industry in 2025.
PIAM said fire insurance recorded RM5.0 billion in Gross Written Premium (GWP) last year, representing 20.9% of the overall portfolio and making it the industry’s second-largest business line after motor insurance.
The segment also posted an underwriting profit of RM700.8 million with a Combined Ratio of 69.5%.
According to the association, fire insurance growth was driven largely by higher rebuild costs and inflation in residential property values, especially for older landed homes in suburban areas.
PIAM also highlighted the importance of having adequate insurance coverage as climate-related risks and property exposure continue to increase.
“Increasing climate-related events highlight the need for stronger preparedness and awareness. Recent incidents have reinforced the importance of adequate coverage, including protection beyond basic fire insurance,” the association said.
Insurance coverage still depends on policy terms
While PIAM says standard fire insurance policies generally apply, actual coverage will still depend on the individual policy terms, insured value and exclusions stated by the insurer.
PIAM also stressed the importance of ensuring that buildings are adequately insured to reflect current replacement or reinstatement values.
At the moment, there is no indication from PIAM that EV-related fires are automatically excluded from standard building fire insurance policies in Malaysia.