In 2022, India has become the fourth largest country in the world as assessed by the automotive industry and it contributes about 6.4% to India’s GDP. But the major challenge for the industry is increasing pollution and high rate of fuel, fuel prices in India are very high (over Rs 100 per litre) in many parts of the states.
to protect your pocket from high fuel prices and high maintenance costs of ICE vehicles, the only solution is electric vehicles. Yes! Electric vehicles are cost effective, emit zero carbon emissions and require no costly maintenance.
If you already own an electric vehicle, then congratulations you are in a win-win situation. As you have insured yourself by buying an EV and not paying more money for fuel and maintenance, it is also necessary to check whether you have purchased insurance for your EVs or not. understand why insurance is necessary for electric cars.
Why Insurance Matters for Electric Vehicles in India
Having insurance for your electric vehicle will protect your EV against accidental damage, natural calamities, man-made calamities, damage in transit, etc. In addition, the owner-driver of the insured vehicle is offered personal accident coverage that protects him/her from accidental injury or death.
Why is electric car insurance so expensive?
Insurance is used for financial protection against physical damage resulting from traffic accidents and liability resulting from incidents in the vehicle. Electric car insurance is expensive compared to normal ICE cars. Due to the battery technology used in electric vehicles, the cost of replacing the battery is high, causing the insurance premium to be higher than that of normal ICE cars.
Why a higher insurance premium for electric cars?
There are several reasons for the higher insurance premiums for electric cars.
- Electric cars are very light, which causes more damage in the event of a collision.
- The electric car runs on a battery which is expensive and has an expiration date, so the owner replaces the battery before it stops working properly.
- Due to high technology, it requires high maintenance and highly skilled labor.
Premium rates were set at a 15% discount to other cars.
Advantages and disadvantages of EV insurance
Benefits of having insurance for your electric cars
- In the event of an unfortunate situation where you have caused injury to a third party or damaged third party property, your insurance policy will cover these liabilities.
- Much of the repair bill is covered by the insurance company in case of fire, natural calamities, riots and loss due to theft. This means that you don’t have to pay an expensive repair bill in the event of damage.
- In case of uncertainties such as accidental death, bodily injury or partial/total disability due to accident, you will get full financial compensation.
Disadvantages of having insurance for your electric vehicle
- The price of electric cars compared to normal ICE cars is higher due to the high technologies used, due to the high value of electric cars, their insured declared value (IDV) increases, resulting in higher insurance premiums automobile.
- The various components used in the car are expensive. The most expensive of these is the battery of the electric car, which represents more than 60% of its value. The car battery has an expiration date and replacing or repairing these parts can be an expensive affair, so the owner replaces the battery before it stops working properly, leading to increased car insurance premiums.
- Not all mechanics can maintain or repair electric cars, it requires specific knowledge and skills. Currently, the number of mechanics qualified to repair electric cars is lower in India than that of traditional auto mechanics. All of these factors lead to high labor costs for electric car parts replacement or repair, and this is another reason why electric car insurance plans are expensive.
Cost of electric car insurance in India?
Premium rates for liability insurance are decided by the Insurance Regulatory and Development Authority of India (IRDAI) as part of a new initiative to boost the adoption of electric vehicles in India. IRDAI has set third party liability insurance premium rates at a 15% discount to petrol/diesel vehicles. Source
Liability insurance rates are based on battery capacity as shown in the table below.
Top 24 Electric Car Insurance Companies in India
|Electric car insurance company||FY20 Engine OD Claim Settlement Ratio|
|1.||IFFCO Tokyo General Insurance||95.30%|
|2.||Royal Sundaram General Insurance||92.66%|
|3.||The Oriental Insurance Company||91.76%|
|4.||HDFC ERGO General Insurance||91.23%|
|5.||Sompo universal general insurance||90.78%|
|6.||Tata AIG general insurance||90.49%|
|seven.||The New India Insurance||89.60%|
|8.||SBI General Insurance||89.51%|
|9.||Bajaj Allianz General Insurance||88.83%|
|ten.||Future Generali India Insurance||88.69%|
|11.||Bharti AXA General Insurance||87.99%|
|12.||ICICI Lombard General Insurance||87.71%|
|13.||Liberty General Insurance||98%|
|14.||Cholamandalam MS General Insurance||85.89%|
|15.||national insurance company||85.71%|
|16.||General insurance Edelweiss||84.52%|
|17.||Reliance General Insurance||84.26%|
|18.||Acko General Insurance||83.91%|
|19.||United India Assurance Company||82.93%|
|20.||Kotak Mahindra General Insurance||82.81%|
|21.||Go Digit General Insurance||80.47%|
|22||Magma HDI general insurance||79.60%|
|23.||Shriram General Insurance||77.26%|
|24.||Navi general insurance||76.20%|