Electric Vehicles (EVs) are reshaping personal mobility through offering quieter driving and lower running costs. As the ownership of these vehicles grows, motor insurance has evolved to match the unique design and usage of electric vehicles. Being clear about how these policies work and what features checks, you can select protection that aligns with the safety of your EV.
In this context, we’ll discuss how electric car insurance differs from conventional insurance, as well as influential factors that affect premiums.
Why is EV insurance Not The Same As Fuel-Vehicle Insurance?
Electric vehicles contain expensive lithium-ion batteries, an electric motor, and dedicated charging devices. These parts are very expensive to fix or replace, which is usually significantly higher than the internal combustion engine parts. Battery, charger or electric motor cover might not be part of a standard motor insurance, with the exception that it is mentioned in the policy or as an additional cover.
An average electric vehicle policy can be purchased as either third-party or comprehensive, though you need to read the fine print as to what is and is not covered.
Basic Covers Available for Automobiles
During the purchase of the vehicle insurance, you may opt to use the own-cover, third-party cover, or comprehensive cover. Among them, one of them is mandatory to choose third-party insurance regarding automobiles. Here’s a brief overview of these forms in vehicle insurance:
- Third-party cover: It covers any recovery against injury, death and damage to property caused by you in an accident to others. It does not cover your own car damage.
- Own damage (OD): This cover compensates accidental damage, fire, theft or losses of your own electric car brought about by natural calamities. Still, you need to purchase third-party cover separately.
- Comprehensive: This insurance policy combines third-party liability and own damage cover. It is the most common choice when combined with EV-specific add-ons.
Primary Factors That Determine EV Premiums
Electric vehicle insurance premiums are calculated based on well-defined parameters. Knowing these allows you to evaluate the expenses and make a better decision when purchasing car insurance.
1. Vehicle price and Insured Declared Value (IDV)
The car’s price is directly proportional to the Insured Declared Value, that is, the present market value of your electric car. Higher IDV results in better claim settlement during total loss or theft, and affects the premium value, as well.
2. Battery capacity and type
The battery size is a significant factor in the calculation of premiums since it depicts replacement and repair expenses. Those vehicles that have larger capacity batteries will need equal coverage to safeguard the most valuable part of the vehicle.
3. Policy type selected
A third-party policy meets mandatory legal requirements, while a comprehensive policy protects your own vehicle against accidents, theft, and natural events. Select the policy that best matches your needs. Also, when choosing a vehicle insurance, make sure you opt for anti-theft discount car insurance on your comprehensive policy to get the maximum coverage.
4. Registration location
The location where your electric car is registered impacts the calculation of the premium since insurers charge various risk rates to various cities and areas. Higher traffic density or frequency of claims attracts a minor increment in own-damage premium.
5. Add-ons
Add-ons extend the coverage of a standard policy to include things that are not included in a particular policy. Insurers like HDFC ERGO provide battery protection, electric motor cover, zero depreciation, roadside assistance and return to invoice add-ons that directly address high-value parts and EV-specific risks.
6. No Claim Bonus (NCB)
A no-claim bonus car insurance is the cumulative discount that is placed on the own-damage premium if no claims are made during the policy period. The more years of claim-free operations, the higher the discount, which lowers the renewal premiums even in the case of electric cars with a higher IDV.
Features That Influence EV Insurance
Electric car components directly affect roadside assistance cover premiums and claim outcomes. This happens because they represent a significant share of the vehicle’s value. Thus, reviewing how each feature is insured helps you confirm how your car is insured.
|
Feature |
Impact on the premium or claim |
What to verify in the policy? |
|
Battery capacity (kWh) |
Higher capacity raises premiums and claim costs |
Inclusion of battery replacement. |
|
Charger and accessories |
Often excluded |
Coverage for chargers and cables. |
|
Electric motor |
Expensive to repair |
Inclusion of electric motor damage in the policy. |
|
Network garages |
EV-trained garages may be fewer |
Availability of EV-certified cashless garages at your
location. |
|
Battery age and condition |
Battery replacement payouts may be limited if the battery has
already undergone normal capacity degradation. |
You need to check whether claim settlement for the battery depends
on its age, usage, or an inspection or health report at the time of
claim. |
Final Thoughts
Electric car insurance is structured around components that significantly differ from petrol, CNG and diesel engine vehicles. Some of its crucial components include the battery, the motor, and the charging equipment. Thus, a well-chosen policy should also have coverage for these parts of your vehicles. In this context, you should select policies that include third-party cover along with your own EV and choose add-ons that can safeguard your vehicle.
