Getting an Electric Vehicle Insurance in India.

Summary

Insuring an electric car is as easy as insuring a car with an internal combustion engine, although it still costs slightly more.

  • Most major insurers like TataAIG, ICICI Lombard and HDFCergo now cover electric cars.
  • Electric car insurance is more expensive than conventional insurance, due to the need for advanced parts and specialist mechanics.
  • There are specialist electric car insurance companies that offer tailored policies for low emissions vehicles.
  • Look for add-on covers while opting for an EV insurance.

In the last couple of years, electric vehicles have had a massive boost in sales and also have been supported by the government with various policies and incentives. in order to make electric vehicles affordable for the market.

Many leading vehicle manufacturers have launched electric cars in India. some of the manufacturers are Mahindra, Tata, Hyundai and MG, and the options are steadily growing. Additionally, there are many upcoming electric cars in India to watch out for from other top brands aswell. In fact, 21 new electric cars in India are expected to be launched in 2020-21.

While the momentum for upcoming electric cars in India is just taking off, it holds a promising future with the government taking some encouraging steps to further this movement. For example, the GST on a Li-ion electric car battery has been reduced from 28% to 18% to promote EVs. and there are subsidies offered to manufacturers willing to manufacture parts and vehicles in India

But being affordable is just part of the solution. the other big problem currently faced by consumers is the limited number of companies providing insurance for their electric vehicle.

The Insurance regulator of India IRDAI has come up with a mandate to incentivize electric car owners and work towards a sustainable environment.  which states that third-party liability insurance for private electric cars in india has been made 15% lower than that of petrol/diesel private cars.

As of now, there is no specialized insurance for electric vehicles, so you have to buy the same insurance as for other petrol or diesel vehicles . However, this is soon set to change. With the demand for upcoming electric vehicles in India on the rise, car insurance providers are developing bespoke insurance options that primarily cater to these variants

So lets look at what things that you need to look for before buying an insurance for your new electric car,

Things to look at before buying an insurance cover:

  1. Look for coverage of common issues and make sure these parts are covered under warranty to cover the risk

    Electric vehicles operate very differently compared to petrol or diesel vehicles. they can travel around 200 to 300 kilometers before discharging completely and take around 5 hours to get fully charged. so the battery and the charging unit are two of the key components of an electric vehicle, the mechanical, electronic and electric failure of these needs to be covered under warranty to cover the risk,

  2. Figure out the value of the electric vehicle at which the insurance cover is provided.

    Insurance should be issued at the correct value of the vehicle and not at a lower valuation. You should also ensure whether the coverage provided is adequate so that your share during an accidental claim is minimal.

  3. Have a look at the Insured Declared Value (IDV)

    These include the availability of add-on features and the type of plan to be opted for while buying an insurance cover. Along with these check the cashless facility, performance of the company, and claim settlement ratio, before choosing for an insurer.

  4. Check if they have additional add-on covers for advanced EV technology

    Electric vehicles now-a-days are designed and built with very advanced technologies similar to your smartphone and they require specialized mechanics to do the repairs

    cost of batteries and components can also be expensive to replace. thus, you always need to look out for additional addon covers to cover these parts. for example in an insurance for petrol/diesel vehicles there are addon covers like engine protector etc.

    Risks of damages due to battery charging, battery leakages, damage of charging connectors, towing of the vehicle to the nearest charging point and provide on-spot assistance should be looked at as add-on covers.

  5. Look for Zero depreciation add-on coverĀ 

    This add-on can help you keep your vehicle near the original valuation as much as possible even after a claim.

    During a claim, the insurance company calculates the depreciation value of the car, which is then deducted from the claim amount. With zero-depreciation add-on cover, the deductions in the claim amount made due to depreciation are waived off and the full amount of damage is paid.

On a closing note, The premium rates for the normal petrol/diesel vehicles are decided on the basis of the engine capacity of the vehicle. However, to apply for an insurance cover for electric vehicles, there is no defined engine and cubic capacity (CC) separately mentioned, for calculating the premium. In the absence of cubic capacity (CC) for an electric car, insurers generally take into consideration the kilowatt (KW) to calculate the insurance premium. 

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