Know Why Electric Cars Insurance Is Expensive?
Pollution and fuel prices are rising constantly and the only solution to these two problems is electric cars. Electric cars are the future of the automobile. Electric cars are getting popular day by day in India. People are opting for e-cars because they are cost-effective charging features with longer distance coverage and environment-friendly nature. Despite all the advantages and cost-effectiveness, the car insurance policy for electric cars is expensive.
However, India is one of the biggest and responsive markets when it comes to cars. This might come as a shock to you but the first electric car in India was manufactured in 1993. The name of the car was “Lovebird” and it was manufactured by Eddy Electric. It was put on for a show in Delhi at the Auto Expo and the Government of India allowed the selling of this car. Despite being, the first electric car in India the manufacturing of this car was stopped due to low sales.
So, is it a myth or electric car insurance is actually expensive? Let us unravel it for you.
Is Electric Car Insurance Expensive?
The first and foremost purpose of a person purchasing an electric car is its environment-friendly nature, as well as cost-effective runtime. The reason behind the higher car insurance premium of an electric car is that the repair cost is higher due to the advanced technology used in the car and electric cars may suffer heavy damage because of their lightweight.
Reason Behind Higher Premium Rates
There are several reasons behind the higher insurance premium rates of the electric car insurance. Here are some of those reasons
● E-Cars Are Expensive
Since the car manufacturers have found a way to reduce the financial burden of fuel from the owner’s shoulder and zero pollution became one of the biggest reasons for e-cars insurance policy premium rates to be higher than the petrol/diesel engine cars.
Electric cars run on batteries of high capacity with the latest technology and the car parts can easily get damaged. Thus the insured declared value of insurance goes higher and increases the premium rates.
● Car Battery Replacement
Electric cars are powered by powerful batteries and come with an expiry date. The car owner has to replace the battery before they stop working properly. Electric cars run on lithium-ion batteries. Lithium-ion batteries and their replacement are costly.
If the life of the lithium-ion battery is long then the car owner would not have to replace the batteries frequently. The lower the frequency of replacement, the lower the cost. This will result in lower premium rates of the third-party car insurance policy.
● High Maintenance
The electric cars are expensive and they require high maintenance. It is because an electric car consists of complex and expensive car parts. Thus, the repairing of e-cars requires high skills to service or repair any damaged part.
Since there are not many electric car owners in India, the number of mechanics is also lower than the traditional car mechanics. This is why the labour cost of servicing and repairing the e-car is high because the skilled e-car mechanic charges higher than a traditional car mechanic.
Now that you know the reason beind high insurance premium rates. Let us also tell you about the Electric car insurance premium rates in India.
Information To Share With Insurer About E-Car While Purchasing The Insurance
The insurance for electric cars and petrol/diesel engine cars are the same but the difference in the premium rates depends on the IDV. So, while purchasing the insurance policy for an e-car, make sure to share these things with your insurer.
The IDV depends on the approximate market value of the car. Hence it is important to tell your insurer about the car’s model.
The year of manufacturing helps the insurance company calculate the depreciation value of the e-car. This helps them assess the Insured Declared Value required for the e-car.
Tell your insurer about the location because there are some locations with high and low risk. The premium rates of the insurance policy will be higher in high-risk areas.
EVs Insurance Cost In India
The premium rates for the third-party liability insurance are fixed by the Insurnce Regulatory and Development Authority of India (IRDAI). As an initiative to promote the use of the electric vehicle in the country, the IRDAI has set the third-party liability insurance premium rates at 15% discount as compared to petrol/diesel engine vehicles.
The third-party insurance rates are based on the capacity of the battery as mentioned in the table below.
Capacity of battery
Premium Rate for 1 year (In INR.)
Premium Rate for 3 years (In INR.)
More than 65 kilowatt
More than 30 kilowatt & less than 65Kilowatt
Less than 30 kilowatt
The premium rates of the comprehensive insurance policy for an electric vehicle vary from insurer to insurer.
How To Keep The Insurance Premium Lower
The premium rates of the e-car vary from insurer to insurer and depend upon the kind of coverage you opt for. Since we are talking about e-cars here, let us tell you that how can you keep the premium rates of your e-car insurance lower?
Purchase Policy Online
The first and foremost measure an e-car owner can take is to purchase the policy online. When the buyer opts for an online purchase, he/she gets to compare different policies and then chose the one that suits their requirement and budget.
Do Not Raise Small Claims
The policyholder should not raise claims for minor damages as it hinders the chances of getting the No Claim Bonus. Hence it is advised to pay for minor damage repairs out of pocket and do not use the insurance policy.
Utilize Accumulated NCB
If you are an old car insurance policyholder and have not raised a claim in your previous years then you must be having a certain percentage of No claim bonus that you can use to reduce the insurance premium rates for your e-car.
Install Anti-theft Device
When you purchase a car insurance policy, the insurance company sends an inspector to check the condition of the vehicle to be insured. If you would install an anti-theft device in your car then the insurer will provide you a certain amount of discount on your car insurance policy.
Wrapping It Up
Electric cars are slowly becoming popular in India and with the increasing fuel rates and pollution, they seem to take place of petrol/diesel engine cars in a few years. As it is recommended to purchase an e-car insurance policy online, you can calculate the premium rates of the policy using a car insurance calculator.
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Note: This is your car’s recommended IDV as per IRDAI’s depreciation guidelines.asdfsad However, insurance companies allow you to modify this IDV within a certain range (this range varies from insurer to insurer). Higher the IDV, higher the premium you pay.
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