As India progresses towards sustainable mobility, electric vehicles (EVs) have steadily gained traction aided by governmental support and increasing model availability. However, prospective EV buyers must factor in associated ownership costs like insurance explicitly formulated for electric cars. Given EVs’ unique technical attributes and repair requirements, premiums differ from regular internal combustion engine vehicles.
Therefore, understanding key policy pricing variables is essential for making informed decisions. This article outlines factors affecting EV insurance costs and provides selection tips for coverage that balance value and lifestyle needs as electric car adoption rises.
Factors affecting car insurance costs for electric vehicles
Several unique factors influence the cost of EV car insurance for electric vehicles, making it different from traditional vehicle insurance premiums.
1. High purchase prices
Electric vehicles incorporate batteries, motors, and various advanced electronic systems, so their base costs are significantly higher than those of conventional internal combustion engine cars. Since auto insurance premiums directly correlate to vehicle value, insuring pricier EVs for damage and replacement requires paying higher yearly policy rates.
2. Specialised service costs
EVs require specialised repair expertise for components like battery packs, electric motors, and sensors. Labour and parts expenses are inflated, and workshops are still gaining technical experience servicing such systems. Thus, the risks of higher repair bills for minor accidents or component failures are calculated into customers’ premium amounts.
3. Built-in safety technologies
While advanced driver assistance technologies like accident warning systems and autonomous emergency braking mitigate accident risks, they depend on intricate electronic architectures. Damage to such safety systems can entail complicated repairs and inflated costs. So, increased repair charges counterbalance some technologies’ savings when determining policy rates.
4. Driving habits
Insurers associate EVs with urban commute patterns involving frequent start-stop conditions. And city driving poses higher risks of minor parking lot scrapes or bumper hits. However, the lower yearly mileages clocked also qualify EV owners for mileage-based discounts in some instances. Insurers strike a balance between these contradictory usage factors.
5. Environmental & government incentives
Tax rebates and non-financial incentives aim to make EVs affordable. However, they don’t directly subsidise insurance costs, as they lower vehicle prices. Some insurers package discounted renewable energy-aligned “green coverage” products, passing environmental savings to eco-conscious buyers through reduced premiums.
Comparison: Insurance for EVs vs. Traditional cars
When weighing insurance costs, EVs tend to lose out due to pricier components and repair challenges. Their advanced safety gear helps avoid major mishaps, but fixing such complex systems can be costly. Meanwhile, regular cars have affordable replacement parts and easier servicing, lowering premiums.
However, the exact difference in rates for electric versus fuel cars does vary. Factors like vehicle value, workshop availability in the area, and risk models used by different insurers balance out the scales. A lower-end EV may be cheaper to insure than a high-end petrol sedan.
As EVs become more mainstream, specialised repair networks will increase to bring down service costs. Then, you can expect the premium gap between electric and conventional vehicles to narrow as well.
Types of car insurance coverage for electric vehicles
When insuring electric vehicles, it’s essential to understand the different types of coverage available to ensure complete protection.
- Comprehensive policy: Comprehensive coverage is strongly recommended for EV owners. These policies cover your vehicle’s damage from accidents, weather events, fire, etc. With EVs having high-cost components like batteries, paying extra for comprehensive coverage is worthwhile insurance against expensive repair bills down the line.
- Third-party liability: Third-party liability coverage is legally required for all vehicle insurance purchases in India. This pays for injury or property damage caused to others if you’re at fault in an accident. While mandatory, only this basic third-party policy leaves your car unprotected. Adding comprehensiveness to the list makes sense for complete peace of mind.
What is covered under the new e-Vehicle comprehensive policy?
The new comprehensive policy for EVs offers coverage for:
- Damage from accidents
- Third-party liability for injuries or property damage.
- Personal accident insurance for disability or death.
- Loss from floods or quakes [Acko]
What is not covered under the new e-Vehicle comprehensive policy?
While comprehensive policies offer a wide range of protection, there are exclusions, such as:
- Wear and tear issues, like battery degradation
- Mishaps while speeding or driving drunk
- Electrical or mechanical failure without external impact
- General negligence-based damage
Insurance premium for third-party car insurance policy
The IRDAI (Insurance Regulator in India) decides minimum third-party premiums to cover liabilities. As an incentive, they’ve set rates for EVs around 15% lower than for petrol and diesel vehicles. However, higher battery capacity means more expensive insurance.
For example, an affordable EV with an entry-level 30kW battery may cost only ₹1,780 annually for third-party coverage. But an expensive luxury EV boasting a higher-performance 100kW battery could pay around ₹6,712 yearly to meet the exact liability requirements.
So, while all EVs receive a slight third-party premium reduction over conventional vehicles, the amount varies greatly depending on retail pricing and battery characteristics. Compact city EVs offer lower base prices, whereas high-capacity cars pay more for the required legal coverage.
When purchasing an electric car, consider how battery size influences range per charge and insurance costs.
Add-on covers for EV car insurance
In addition to comprehensive insurance, some useful extras can provide complete peace of mind:
- Roadside assistance: Covers tow costs, tyre changes, jump starts, etc.
- Zero depreciation: Ensures you get the total claim amount without part wear and tear deductions. (PolicyBazaar)
- Return to invoice: Provides the full original value in case of total loss.
- Key replacement: Handles the bill for damaged or missing keys.
Tips to choose the right electric car insurance policy
When picking the right electric car insurance, keep a few things in mind:
- Evaluate needs: Consider factors like vehicle cost, repair expenses and usage patterns. Go comprehensive for pricey EVs with hard-to-source parts.
- Compare premiums: Don’t go directly with the first quote. Compare rates across insurers, especially ones with unique EV offerings.
- Consider add-ons: Optional covers provide extra convenience based on car use.
- Understand terms: Read the fine print thoroughly and clarify the claim scenarios.
Conclusion
Given the significant vehicle investments, embracing electric mobility warrants insurance safeguarding. Comprehensive policies tailored to address the distinct service ecosystem around EVs may carry higher upfront costs but provide vital protection.
As the still-developing green mobility space evolves, informed decisions become crucial when selecting covers aligned to individual usage profiles. Comparing offerings, evaluating add-ons, and checking the fine print facilitates choosing policies that sustain eco-friendly driving. Ultimately, the ideal strategy balances value and electric asset protection as adoption expands.