Electric vehicles (EVs) are growing in popularity as more environmentally friendly and cost-effective alternatives to fossil fuel-powered cars. However, ensuring EVs’ insurance coverage comes with some unique considerations. This blog post will provide an informative overview of how EVs impact car insurance, key questions one should ask, and tips for getting the best insurance coverage for EVs.
EV trend in India
India is aiming for 30% of private cars, 70% of commercial vehicles, and 80% of two and three-wheelers to go electric by 2030. What exactly is driving this policy push towards electric mobility? Here are some key factors:
- Rising fuel prices
- High pollution levels in cities like Delhi and Mumbai
- Government subsidies and incentives for purchasing EVs
- Support for developing EV charging infrastructure under the FAME II scheme
As a result, EV sales are expected to surge over the next decade. Indian auto companies are also launching affordable electric car models to cater to Indian buyers.
How EVs impact your insurance rates
In general, electric vehicles are cheaper to insure than gas-powered cars. There are a few key reasons for this:
- Lower repair costs: EVs have fewer mechanical parts than internal combustion engine vehicles. There are no spark plugs, pistons, etc. This means fewer things can break and increase the repair bills if you get into an accident.
- Safety features: Today, most EVs offer advanced features like automatic emergency braking and lane keep assist. These safety features help avoid accidents in the first place. Less risk of accidents translates into lower premiums.
- Driver demographics: Early adopters (a relatively young age group) of EVs tend to have better driving records than the general public, so insurance companies consider extending insurance to this group less risky.
However, some factors can increase insurance rates for electric cars. These include the following:
- High sticker price: Even though EVs are cheaper to repair, they tend to have higher sticker prices due to battery costs. This can translate to higher premiums.
- Inexperienced mechanics: Many local mechanics still need more training and experience for working on electric vehicles. Insurance companies may charge you more if they don’t trust repair shops in your area to service an EV properly after an accident.
- Unfamiliar technology: Insurers must be more open to covering new and unproven technologies. As EVs become more mainstream, this factor should improve.
Key insurance questions to ask
When shopping for electric vehicle insurance, one should understand how insurers handle the unique aspects of EVs. Here are some key questions one should ask:
- Do you offer discounts for EVs with advanced safety features?
- Do you factor in low EV repair costs when determining premiums?
- Are there warranty or replacement cost protections if the battery or electric motor fails?
- Do you extend assurance that a certified EV technician will do repairs?
- If the EV needs towing, will you transport it to a qualified service centre?
Clarifying these EV-specific considerations will help you find the right coverage at the best price.
Tips to save on EV insurance
Follow these tips to reduce your electric car insurance costs in India:
- If you drive less often, consider the Meter Switch On/Switch Off auto insurance policy add-on that Zurich Kotak General Insurance offers.
- Try buying insurance from the same provider for your EV and home.
- Research for rebates provided by the government for electric vehicles in India
- Focusing on good driving behaviour can help one save on costs with no claim benefits.
The future of insuring electric vehicles
As electric cars become popular, insurance providers will adapt their products and rates to accommodate electric vehicles better. One can expect to see:
- Usage-based insurance tied to actual range rather than estimates for electric vehicles
- Premium discounts for vehicles supporting smart charging and vehicle-to-grid integration (This point is just for information, and it is still not relevant in India)
- Custom coverage for expensive EV batteries
- Special plans for autonomous electric vehicles
Over time, insuring electric vehicles may become cheaper than fossil fuel-powered cars due to lower risks and fewer parts requiring coverage. For now, EV owners benefit from lower costs but must ensure they work with an insurer who truly understands electric vehicle technology and ownership.
Key takeaways
Electric cars are generally cheaper to insure due to lower repair costs, safety features, and relatively more affluent drivers. However, high sticker prices and unfamiliarity with technology can increase rates.
To get the best rate, one should ask the insurers specific questions about handling EV batteries, repairs, towing, charging equipment, and discounts. It is always better to consider multiple providers, leverage available discounts, consider usage-based policies, and improve your driving for lower premiums.
As electric vehicle adoption grows, one can expect more customised and competitively priced insurance options. Driving an electric vehicle can save you money on fuel, maintenance, and insurance. Finding the right coverage can help one maximise their EV ownership benefits.
Frequently Asked Questions
Do electric vehicles qualify for specialised insurance policies in India?
Top insurers offer insurance policies tailored for EVs covering battery damage, charging equipment, and battery-related roadside assistance.
Does battery size and type of an EV affect insurance rates?
Battery size and type can significantly impact insurance rates. Larger and more advanced batteries that are expensive to replace can increase insurance premiums due to their higher repair costs.
Is insurance for hybrid vehicles cheaper than fully electric cars?
Insurance premiums for hybrid cars are slightly lower than those for fully electric cars. Hybrids combine combustion engines with electric components, which lowers their repair and replacement costs compared to EVs.
Are charging-related damages covered under EV insurance?
Many EV insurance policies cover charging-related damages, including power surges, stolen chargers, and charging accidents. Confirming the specifics of these policies with your insurance provider is always better.
Does EV insurance include coverage for software or technology-related issues?
Some comprehensive EV policies may cover software issues if they affect vehicle performance or safety. However, software issues will likely come under warranty and not insurance.
Are EV owners required to disclose charging habits to insurers?
Disclosing charging habits is not required. However, telling insurers you charge consistently at home rather than at public stations may lead to premium discounts since home charging is safer.
