Until just a decade ago, electric vehicles (EVs) were a dream for many and a possession for a select few. The scene has changed drastically over the last few years. Favourable government policies and the growing adoption by car owners mean that EVs, touted as the greener commuting option, are going to rule Indian roads very soon.
It’s interesting to note that while industry data suggests that nearly 15000 of the 3 million passenger vehicles sold were electric vehicles in 2021, the corresponding sales figures shot up by 84% in 2022. As EVs grow, so does the probability of accidents, theft, and other damages. This in turn has impacted the motor insurance market.
Motor Insurance for EVs
Like petrol and diesel-driven cars, motor insurance for EVs is available in two variants- third-party insurance and comprehensive insurance. According to the Motor Vehicles Act of 1988, car owners must have third-party insurance for fuel-driven vehicles and EVs alike, for protection against damages caused to a third party in any event where the vehicle is involved. *
Just like conventional fuel cars, third-party car insurance policy premium for EVs is fixed by the Insurance Regulatory and Development Authority of India (IRDAI). Electric vehicles being environment friendly, IRDAI has suggested to give few benefits on third-party insurance premiums of EVs to promote their usage. *
For any further details pertaining to IRDAI rules, please visit the official IRDAI website.
Similar to conventional cars, electric vehicle insurance offers a cover for damages due to accidents at a slightly higher premium. The comprehensive insurance policy coverage includes:
● Care for the EV with roadside assistance services
● On-site charging (in select cities)
● Pickup and drop (Towing)
● Dedicated EV helpline
● Medical and legal assistance
Despite being a little on the higher side, comprehensive car insurance policies for EVs offer certain benefits:
1. The premiums could be lower than the cost of damages in accidents. *
2. There may be the option of availing add-ons to ensure better protection of your EV. The list includes: *
● Depreciation cover
● Motor Protection
● Consumable add-on cover
3. Support can be availed at the time of crisis; the comprehensive policy can turn out to be a quick fix for the damages occurred due to accident. *
4. Because of third-party damage coverage, a comprehensive policy may help in complying with the Motor Vehicles Act of 1988. *
5. It may feel relaxing to know that you have financial protection when your EV is damaged occurred due to accident. *
Why is the insurance for EVs a bit costly?
Compared to its fuel-driven counterparts, financial protection for EVs comes at a higher cost as the comprehensive insurance policies here are relatively expensive. But there are definite reasons behind this. *
EVs are expensive:
The cost of EVs is higher than petrol or diesel cars, and insurance premiums for them are automatically higher. Cutting-edge technology loaded in batteries and car parts contribute to the higher price of vehicles and the higher cost of insuring them.
Expensive car parts:
Most and not all of the car parts in an electric vehicle are high-end, the costliest of them being the lithium-ion battery. So, the cost of their repair or replacement is high too, resulting in higher insurance premiums. *
EVs being backed by sophisticated, advanced and premium technology, there is still a dearth of upskilled mechanics who can cater to their damage. Therefore, only authorized centres can repair the EVs, while conventional cars can be attended by local garages for minor damages. The cost of repairing EVs is thus on the higher side, pulling up the insurance costs. *
The ray of hope
Even though EVs and their insurance are still a bit costly, experts predict that things will soon change in favour of the consumers. If trends are to be believed, higher demand for electric vehicles will pull more manufacturers into the market, thereby lowering the cost of car parts as well as the EV prices. With more consumers choosing electric vehicles over fuel-driven cars, expertise, and technical support will also increase. Thus, while prices reduce, the lack of skilled mechanics is also expected to be addressed. As a result, insurance costs are expected to go down too. *
*Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
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