Why Is Electric Car Insurance a Must-Have?

As more people make the switch to electric vehicles (EVs), the automobile industry is undergoing a major transformation. While EVs offer long-term savings and eco-friendly driving, they also bring new challenges, especially when it comes to car insurance.

EV insurance isn’t the same as regular car insurance. From high-cost components to different repair procedures, electric cars demand a more tailored insurance approach.

Understanding EV Insurance in India: What’s Mandatory and What’s Optional?

Just like petrol or diesel vehicles, every EV must have car insurance to legally run on Indian roads.

Third-party insurance is mandatory by law for all vehicles. It covers injury or damage caused to other people or property.

However, it’s the own-damage cover that protects your vehicle from fire, theft, natural disasters, or accidents. While this part isn’t legally compulsory, it’s highly recommended for full protection, especially for EVs, which are generally more expensive to repair.

Why is Electric Car Insurance Different?

Electric vehicles may look similar to traditional cars, but when it comes to components and risk factors, they’re worlds apart. That’s why electric car insurance needs special attention.

Here’s what makes EVs unique in the insurance world:

• High Battery Cost: The battery is the most expensive part of an EV. Replacing it after damage or fire can be costly, and standard policies may not always offer full coverage.

• Limited Repair Networks: Not every garage is equipped to handle EV repairs. Special tools and expertise are needed, which can increase the cost of claims.

• Technology Risk: EVs come with advanced electronics and software. A minor glitch in the system could turn costly and complicated, especially if insurers don’t offer tech-specific add-ons.

• Fire Risk: Though rare, battery fires in EVs can lead to total damage. This risk demands a stronger own-damage cover and quick claim processing.

What are Top Challenges of Insuring Electric Vehicles?

Let’s take a closer look at why you can’t treat EV insurance like any other car insurance:

• Higher Sum Insured
  EVs tend to be more expensive than their fuel counterparts. The Insured Declared Value (IDV) of EVs is often higher, which leads to a higher premium.

• Costlier Repairs
  EV parts, especially batteries and electronic components, aren’t easily available. Labour charges are higher, and the turnaround time may be longer.

• Fewer Comparison Options
  As EVs are relatively new, many insurers are still developing suitable policies. This limits your choices for customisation and pricing.

• Lack of Awareness
  Many buyers opt for basic third-party cover just to meet legal requirements, without realising the importance of own-damage cover for an EV.

What to Look for in an EV Insurance Policy?

If you’re buying or already own an electric vehicle, make sure your car insurance includes these essentials:

• Comprehensive Cover: Always go beyond third-party insurance. A comprehensive plan protects your EV against a range of risks including theft, accident, fire, and natural calamities.

• Battery Coverage: Ensure your policy explicitly mentions coverage for battery-related damage or replacement.

• Cashless Repair Network: Look for insurers tied up with EV-specialised garages for seamless repairs.

• Zero Depreciation Add-on: This ensures you get full claim settlement without factoring in depreciation, which is especially helpful given the high cost of EV parts.

• Roadside Assistance: EVs may face range anxiety or charging issues. Having roadside help is a must.

• Charging Equipment Cover: Some policies offer protection for your home or portable charger, which is a valuable add-on.

Tips to Reduce EV Insurance Costs

Just like traditional car insurance, you can take steps to lower your EV premium:

• Install anti-theft devices to enhance security

• Maintain a clean driving record to avail No Claim Bonus (NCB)

• Opt for higher voluntary deductibles (only if you’re confident about covering small damages)

• Compare EV policies online to find the best deal with suitable add-ons

An electric car may require less maintenance and fuel, but when it comes to insurance, paying special attention is a must. A generic plan may not offer the protection your EV truly needs.

By choosing the right electric car insurance, you not only safeguard your high-tech investment but also ensure peace of mind in this new electric era. Understand your policy, read the fine print, and make sure you’re covered where it matters most.