Electric Car Insurance: Insurance for Electric Vehicles (EVs)

Electric vehicles have created a lot of buzz in the past few years as more and more manufacturers come up with new electric cars. Electric vehicles are said to be the future of mobility, and they are also good for the environment. If you own an electric car and are planning to insure your electric vehicle, this article will provide you with all the information related to Electric Car Insurance. Buying insurance for electric vehicles can be a tricky task given the complex nature of EVs (Electric Vehicles). So, read on to get all the details about electric vehicle insurance.

What is Electric Car Insurance?

Well, electric car insurance is no different than conventional car insurance. The only difference is the working and components of an electric vehicle are more advanced, and hence the insurance coverage needs to be extensive. Rest everything remains the same. Similar to conventional car insurance, you need to have mandatory third-party liability coverage for EVs to comply with the Motor Vehicles Act.

Electric Car Insurance

But when it comes to comprehensive car insurance for electric cars, it gets a bit complicated. Since EVs do not have engines and several other components seen on conventional vehicles, the coverage becomes a little tricky. But with the popularity of electric cars, several insurance providers have come up with specialised comprehensive insurance plans and add-ons for electric cars, which cover the vital components of an EV.

The battery is one of the most important and expensive components of an EV, and comprehensive electric car insurance also covers the damage caused to the battery. Rest of the components of an electric vehicle are almost similar to a conventional car except for the electric motors. Car insurance for electric cars also comes with special add-on covers for extensive coverage. Some insurance plans even offer add-ons bundled with the insurance policy itself.

Can We Insure an Electric Vehicle?

There is no doubt that electric cars are eco-friendly, but at the same time, they are not pocket-friendly. Electric vehicles are expensive, and insuring an electric car is crucial. EVs are complex machines with advanced technology, and even minor damages can result in a costly repair bill. Apart from that, the battery pack of an electric vehicle is the most expensive component, and any damages to that can cost you dearly.

But with comprehensive electric car insurance, damages to your EV are covered. It might be the battery pack damage or minor damage to the vehicle. The insurance plan covers it all. Apart from the vehicle damage cover, a car insurance policy also provides third-party liability cover and personal accident cover. Below are the reasons for buying a car insurance policy for your electric car:

  • Comply with Rules and Regulations: In India, it is illegal to drive a car without a valid car insurance policy. As per the Motor Vehicles Act, it is compulsory to have at least a third-party liability insurance plan for your electric car.
  • Third-Party Liability Cover: A car insurance policy provides coverage against damage to third-party property or life. With the third-party car insurance cover, you need not worry about legal or financial liability in case of damage to a third party in an accident.
  • Own Damage Cover: A comprehensive electric car insurance covers you against damage to your EV. The insurance covers accidental damages and damage due to fire or man-made/natural disasters. The insurer will take care of the repair works, and you need not worry about spending money on repairs.
  • Accidental Cover: Apart from the vehicle damage cover, electric car insurance also offers personal accident coverage. The insurance policy covers accidental death or injury/permanent disability to the driver/owner. The insurer will pay the sum insured amount to the nominee of the policyholder, in case of accidental death.

Electric Vehicles (EV) Insurance Plans:

You can mainly buy two types of electric vehicle (EV) insurance plans: Third-Party electric car insurance or Comprehensive electric car insurance. Both the insurance plans offer different sets of coverage benefits. Below are details of both the electric car insurance plans:

Third-Party Electric Car Insurance

As the name suggests, third-party electric vehicle insurance provides third-party liability (TPL) coverage. The insurance plan covers damage to third-party property or life. As per the Motor Vehicles Act, all new electric vehicles need to have a long-term (3-year) third-party insurance policy. But note that, third-party electric car insurance does not provide an Own Damage cover.

Comprehensive Electric Car Insurance

Purchasing comprehensive electric vehicle insurance is optional, but it provides extensive coverage when compared to a third-party insurance plan. A comprehensive EV insurance plan offers third-party and Own Damage cover. You are covered against damage to your electric car and injury/accidental death of the driver. If you are buying a new electric car, it is always better to opt for a comprehensive electric car insurance policy as EVs are expensive and come with complicated mechanics.

Features Of The New E-Vehicle Comprehensive Policy:

With the rapidly increasing popularity of electric cars, there is a need for specialised insurance plans for electric vehicles. One such specialised insurance plan is the E-Vehicle Comprehensive policy. It is tailor-made for battery-powered cars, and it covers the battery pack, which is the most important and expensive component of an EV. Below are the features of electric vehicle comprehensive policy:

Inclusions of E-Vehicle Comprehensive Policy:

  • Loss/Damage to third-party property or life.
  • Loss/Damage to the electric vehicle due to an accident.
  • Loss/Damage to the electric vehicle due to fire.
  • Loss/Damage to the electric vehicle due to the explosion of the battery pack.
  • Injury/Accidental death of the driver/owner.
  • Battery pack cover (Optional).
  • Loss/Damage to the electric vehicle due to natural disasters such as floods, earthquakes, cyclones, storms, etc.
  • Loss/Damage to the electric vehicle due to man-made disasters such as vandalism, etc.

Exclusions of E-Vehicle Comprehensive Policy:

  • Loss/Damage to the electric vehicle due to electrical/mechanical failure.
  • Loss/Damage to the electric vehicle due to reckless/rash driving.
  • Loss/Damage to the electrical vehicle due to improper handling.
  • Loss/Damage to the electric vehicle when driving without a valid driving licence.
  • Loss/Damage to the electric vehicle when driving under the influence of alcohol/intoxicating substances.
  • Any add-on covers which are not purchased.

Insurance Premium Rates For Electric Vehicles By IRDAI:

The Insurance Regulatory & Development Authority of India (IRDAI) is responsible for governing the functions of insurance companies in the country. IRDA also calculates and notifies the premium rates for the mandatory third-party motor insurance. For private electric vehicles, IRDAI offers a 15 percent discount on third-party premium rates when compared to the premium rates of conventional vehicles. The discount is offered as an incentive for using an eco-friendly vehicle, and to encourage the use of EVs in India.

Premium Rates For Third-Party Electric Vehicle Insurance:

Below are the premium rates for third-party electric car insurance as proposed by IRDAI:

Private Electric Cars1-Year Policy (Short-Term)3-Year Policy (Long-Term)
Up to 30kWRs. 1,761Rs. 4,493
Over 30kW and up to 65kWRs. 2,738Rs. 8,104
Over 65kWRs. 6,707Rs. 20,659

Add-ons for Your Electric Car Insurance:

When you buy comprehensive electric car insurance, you have the option of purchasing add-ons to expand the coverage of the insurance policy. Below are the available add-ons for your electric car insurance:

How to File A Claim?

In case you are involved in an accident, and if your electric car is damaged, you need to apply for an insurance claim. Follow the steps below to apply for an electric car insurance claim:

  • Step 1. Contact the insurance company or visit the website to apply for a claim.
  • Step 2. Explain the nature of the damage and produce pictures of the damaged electric car.
  • Step 3. In case of an offline claim, the insurance company will send an executive to survey the vehicle.
  • Step 4. Discuss and finalise on the coverage and repair works.
  • Step 5. In case of online claim settlement, you can repair the vehicle at the insurance provider’s network garages.
  • Step 6. For offline claim settlements, get the vehicle repaired and settle the garage bills from the insurance claim amount offered by the insurer.

Tips to Choose the Right Electric Car Insurance Policy:

There are several factors to be considered while buying an electric car insurance policy. From the cover to the after-sales service, everything matters while purchasing an insurance policy for your electric car. Below are the points to be considered while buying an electric car insurance policy:

  • Legal Liability Coverage: Always check if the insurance policy offers a legal liability cover, which is useful if the car is driven by a paid driver. The legal liability coverage provides coverage against injury/accidental death of the driver.
  • Extensive Coverage at Low Premium: Always look for an insurance policy which provides extensive coverage at a low premium. In other words, you should look for an insurance policy for your electric car, which offers extensive coverage benefits at a reasonable price.
  • Opt for Digital Car Insurance: In this modern era, everything is available on the internet. Same applies to car insurance as well! You can consider buying electric car insurance from digital-first insurers. Buying electric vehicle insurance online saves you a lot of time and money. Moreover, the process of purchasing an insurance policy online is simple when compared to an offline purchase.
  • Compare Insurance Plans: When buying a car insurance policy for your EV, compare car insurance plans offered by different insurance providers. This way, you will get an idea about which insurer provides better coverage at a lower premium. Also, do check for the after-sales service, because it is one of the important factors while buying electric car insurance.
  • Check What’s Covered and What’s Not Covered: Always go through the inclusions and exclusions of a car insurance policy. Check if the insurance plan covers the battery pack of your electric car. Some insurance plans come bundled with add-on covers. So, always check the coverage benefits before buying an electric vehicle insurance policy.
  • Read the Terms and Conditions: It is important to read the terms and conditions when purchasing a car insurance policy. Never ignore the T&C of an insurance policy as it contains vital information about the coverage benefits and conditions about the after-sales service, claims and network garages.

Electric vehicles have a pivotal role to play as far as the future of mobility is concerned. Eco-friendly vehicles are the way to go forward, to save our environment. But with the current scenario, EVs are considerably expensive when compared to their conventional counterparts. Insuring an electric car is crucial as the value of an EV is very high, and a comprehensive car insurance plan provides extensive coverage for your EV. So, when you buy an electric car, buying a comprehensive car insurance policy is a must!

Frequently Asked Questions:

Electric cars are not so popular in India given the limited availability of charging stations and high pricing. Only a handful of EVs are currently on sale in the country. So, buying electric car insurance can be a difficult job. Below are some of the most commonly asked questions related to electric car insurance. Refer to these queries if you have any doubts about purchasing an insurance policy for your electric car:

Is car insurance compulsory for electric cars?

Yes. Similar to a conventional car, purchasing at least third-party liability cover is compulsory for electric cars to comply with the Motor Vehicles Act. You cannot drive your electric car on roads without a valid car insurance policy.

How much does it cost to insure my electric car?

The cost of electric car insurance depends on the value/condition of the electric car and the insurance plan and add-ons you choose. The higher the value of the electric vehicle, the higher the cost of insurance.

Why does electric car insurance cost more than conventional car insurance?

Electric cars are an expensive piece of machinery, and they are equipped with advanced technology. So, naturally, the price/value of an EV is very high when compared to a conventional petrol/diesel car. So, the cost of electric car insurance is on the higher side when compared to conventional car insurance.

How can I buy the right insurance policy for my electric car?

While buying electric car insurance, you can consider opting for digital insurance. Buying electric car insurance online will enable you to compare insurance plans offered by different insurance providers and also choose the right add-ons for your electric car. Always check for the inclusions and exclusions before purchasing electric car insurance.

Is it compulsory to buy add-ons for electric car insurance?

No. Buying add-on covers for electric car insurance is optional. However, you can consider buying add-ons as it will provide extensive coverage for your electric cars. Some insurance plans are also bundled with certain add-ons for better coverage benefits.

Will the electric car insurance cover the battery of my EV?

Usually, comprehensive electric car insurance covers any damages to the battery pack as it is the most expensive component of an EV. Some insurance providers also offer add-on on to cover the battery pack.

Do I get any incentive/discount on electric car insurance?

The insurance provider does not provide any discount on electric car insurance. But the IRDA offers a 15 percent discount on third-party liability coverage premium for electric vehicles. Note that the discount applies only to a third-party insurance plan.

How can I reduce the cost of electric car insurance?

You can reduce the cost of electric car insurance by installing an anti-theft/security device on your electric car. The security device will minimise the risk of theft, hence will reduce the insurance premium. Also, avoid buying unnecessary add-ons to reduce the electric car insurance premium.

Can I buy a long-term car insurance plan for my electric car?

Yes. You can buy a long-term insurance plan for your electric car. Usually, you can buy a 3-year car insurance policy for your electric vehicle. If you are buying a new electric car, it is compulsory to purchase a 3-year third-party liability cover.

Will the battery capacity of my electric car affect the cost of insurance?

Yes, the battery capacity affects the cost of insurance. The higher the battery capacity, the higher the car insurance premium. Powerful battery packs are expensive and are of high value, and naturally, the cost of insurance also increases with the increase in the battery capacity.