Electric Vehicle Insurance

Electric Vehicle Insurance and Premiums in India

Electric vehicles (EVs) are becoming increasingly popular in India, driven by government incentives, rising fuel costs, and growing environmental consciousness. As more people make the shift to EVs, it's important to understand how insurance for these vehicles works and what factors influence their premiums.

What is Electric Vehicle Insurance?

Electric vehicle insurance in India is similar to traditional motor insurance but is specifically designed for EVs. It provides financial protection against:

• Accidental damage
• Theft
• Fire
• Natural calamities
• Third-party liabilities
• Damages to the battery (in some policies)

Types of EV Insurance Policies (Similar to regular Insurance policies)

• Third-Party Insurance:
  Mandatory by law; covers damages/injuries to third parties.
• Own Damage Insurance:
  Covers own damage (accident, fire, theft, etc.) and may include add-ons like battery protection, roadside assistance, etc.
• Comprehensive Insurance:
  Covers own damage (accident, fire, theft, etc.), third-party liabilities, and may include add-ons like battery protection, roadside assistance, etc.

Factors Affecting EV Insurance Premiums:

• Insured Declared Value (IDV): Market value of the EV.
• Vehicle Type & Model: Higher-end EVs attract higher premiums.
• Battery Cost & Type: Since the battery is the most expensive component, policies may offer special coverage and affect premium.
• Location: City, theft risk, accident rates, etc.
• Add-ons: Battery protection, zero depreciation, roadside assistance, etc.
• No Claim Bonus (NCB): Discounts for claim-free years.

Add-Ons for Electric Vehicle Insurance India

• Return to Invoice Cover: Covers the complete invoice value (including registration charges and road tax) or the current on-road price, whichever is lower, if your car is stolen or damaged beyond repair.
• Battery Protection Cover: Covers repair/replacement of the battery due to accidental damage. This is specifically offered for Electrice Vehicles.
• Zero Depreciation Cover: Full claim settlement without depreciation deduction.
• Roadside Assistance: Towing, charging, minor repairs, etc. It is helpful for EVs since EV has more probability for Towing than a Petrol or Diesel vehicle.
• Consumables Cover: Covers costs of EV-specific consumables.

Where can you Buy EV Insurance?

• Online: Directly from insurer websites or intermediaries portals.
• Offline: Through agents or at the car dealership.

Tips to lower your EV Insurance premium

• Install anti-theft devices.
• Accumulate No Claim Bonus (NCB).
• Compare policies for best rates and coverage.
• Opt for voluntary deductibles.

Premiums for EV Car Insurance

The Insurance Regulatory and Development Authority of India (IRDAI) sets base third-party premiums for Electric Vehicle Insurance for car or bike, which are lower than those for ICE vehicles. This is due to government efforts to promote EV adoption and the lower risk profile (fewer moving parts, less frequent claims historically).

Table: EV vs Petrol Vehicle 3rd Party Insurance Premiums

Private Car:

Private Cars	3rd Party Insurance Premium
Not exceeding 1000 cc	Rs. 2,094
Exceeding 1000 cc but not exceeding 1500 cc	Rs. 3,416
Exceeding 1500 cc	Rs. 7,897

Electric Car:

Private Cars (EV)	3rd Party Insurance Premium​
Not exceeding 30 KW	Rs. 1,780
Exceeding 30 KW but not exceeding 65 KW	Rs. 2,904
Exceeding 65 KW	Rs. 6,712

Based on the information above, EV Insurance cost is generally lesser than those for traditional petrol cars. However, let’s take a closer look with a specific comparison:

Example:

• Third-party insurance premium for Tata Nexon (Fearless Plus Petrol, 1199cc):  Rs. 3,416
• Third-party insurance premium for Tata Nexon EV (Empowered Plus 45 Electric, 105KW): Rs. 6,712

In this example, the Electric Vehicle insurance cost is higher mainly due to its more powerful electric motor (105KW). While both cars appear similar in name and looks, their performance differs greatly, which makes the EV’s premium seem more expensive. If the EV car’s power were under 65KW, its insurance premium cost would actually be lower than that of a petrol (ICE) 🚗.

Conclusion:

Electric vehicle insurance in India is becoming more affordable and comprehensive, especially for EVs with lower power ratings. However, as shown in the example above, EVs with higher power can attract higher premiums compared to their petrol counterparts.

As the EV market expands, expect insurers to introduce more customized products and competitive rates.

Pro Tip:

Always compare different policies and ensure your EV insurance policy includes battery protection and roadside assistance for maximum coverage.

References:

• IRDAI Premium Rates from IRDAI website
• Insurer and Intermediate websites

*Data is for FY 22-23 and is for the purpose of comparison only. For latest data, please refer to IRDAI website

Regards,

Honvest Team.