Insurance Guide: Electric vehicle (EV) adoption is rising in India, but insuring them costs more than insuring gasoline or diesel cars. Most policies don’t cover the battery by default. Coverage is usually available only as an add-on. This overview of EV insurance highlights the best coverage options and key factors to consider when choosing a policy.
Why does EV insurance cost so much?
EV insurance costs more because electric vehicles have a higher Insured Declared Value (IDV) compared to gasoline and diesel vehicles. In general, EVs are more expensive than their fuel-powered counterparts. When choosing insurance for an EV, insurers look at several factors, including the vehicle’s model, manufacturer, battery pack capacity, and the region of registration.
Does an EV’s insurance cover the battery?
Batteries are typically not covered by standard EV insurance packages. The majority of comprehensive insurance plans do not cover losses brought on by the vehicle’s wear and tear and depreciation. This is due to the fact that batteries eventually need to be replaced due to their limited lifespan.
However, the majority of insurance providers do offer battery coverage as a “rider” or “add-on” feature. At an additional expense, these features may aid in extending the insurance policy’s coverage. To make sure your car has adequate coverage, you can purchase it.
Key Points before Buying an EV:
The battery is the most crucial component of an EV. Since replacing it can be costly, it’s important to maintain continuous insurance coverage. When buying battery coverage for your EV, keep the following factors in mind.
1. Before purchasing the “add-on” coverage, you should first take the vehicle’s age into account. You should choose the “add-on” cover if the EV is less than five years old. The majority of insurers only provide this coverage for a predetermined number of years. However, as long as insurance providers are offering it, you should take advantage of it.
2. Sum insured: Replacing the battery usually costs between 40% and 50% of the vehicle’s entire cost. Therefore, while determining the sum insured for the “add-on” insurance, you should have this in mind. Since inflation would cause the battery’s future expenses to increase dramatically, you should choose the greatest amount protected.
3. Geographical Location: If you live in a flood-prone area, opt for a higher sum insured for your EV battery. Premiums will be higher due to the increased risk of water damage, but in such regions, comprehensive battery coverage is essential despite the added cost.
4. Co-payment and Deductibles: Most battery “add-on” policies include co-payment and deductible clauses. If your policy has these, you’ll need to cover a portion of the claim during settlement. Always read the fine print carefully and, if possible, choose a policy with standard deductibles and no co-payment requirements.
Primary Factors to Consider Before Taking EV Insurance:
Unlike petrol or diesel vehicles, EVs require specific coverage. Owners should choose a “Motor Protector” add-on, which provides emergency protection for the EV’s motor. Most standard EV insurance policies don’t include this, but adding it can save significant repair costs if the motor gets damaged.
It’s also important to ensure charging equipment, sensors, and cameras. Additionally, opting for a “Roadside Assistance Cover” is recommended, as it can provide critical help during emergencies involving your vehicle.
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