Electric vs Fuel Cars: Know why insurance of electric vehicles is more expensive?

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Until just a decade ago, Electric Vehicle (EV) Were a dream for many and a possession for a select few. The scene has changed a lot in the last few years. Favorable government policies and increasing acceptance by car owners means that EVs, touted as green mobility options, are going to rule Indian roads very soon.

Sales of EVs to increase by 84 percent in 2022

It is interesting to note that while industry data shows that out of the 3 million passenger vehicles sold in 2021, about 15000 were electric vehicles, the sales figures increased by 84% in 2022. As EVs increase, so does the possibility of accidents and theft. and other losses. This has affected the motor insurance market.

motor insurance for ev

Like petrol and diesel-powered cars, motor insurance for EVs is available in two types – third party insurance and comprehensive insurance. According to the Motor Vehicles Act of 1988, car owners must have third-party insurance for fuel-powered vehicles and EVs alike, in order to be protected against damage caused to a third party in the event of any incident where the vehicle is involved. So to receive.

Third Party Insurance

Like conventional fuel cars, the third party insurance policy premium for EVs is decided by the Insurance Regulatory and Development Authority of India (IRDAI). With electric vehicles being environment friendly, IRDAI has suggested offering some benefits on third party insurance premium of EVs to promote their use.

Comprehensive Insurance

Similar to conventional cars, electric vehicle insurance provides cover for damages caused by accidents at a slightly higher premium. Comprehensive insurance policy coverage includes:

• Take care of EV with roadside assistance services

• On-site charging (in select cities)

• Towing

• Dedicated EV Helpline

Despite medical and legal aid being slightly on the higher side, comprehensive car insurance policies for EVs offer some benefits:

1. The premium may be less than the cost of damage in accidents.

2. There may be an option to avail add-ons to ensure better safety of your EV. The list includes:

• depreciation cover

• motor safety

• add-on cover

3. Help can be obtained in times of crisis; A comprehensive policy can become a quick solution to the damage caused due to an accident.

4. Due to third-party damage coverage, a comprehensive policy can help comply with the Motor Vehicles Act of 1988.

5. It can be a relief to know that you have financial protection when your EV is damaged due to an accident.

Why is insurance a bit expensive for EVs?

Compared to their fuel-powered counterparts, financial protection for EVs comes at a higher cost as comprehensive insurance policies are relatively expensive here. But there are definite reasons behind this.

EVs cost more than petrol or diesel cars, and insurance premiums for them are automatically higher. The advanced technology packed into batteries and car parts contributes to the high price of vehicles and the high cost of insuring them.

Most, but not all, of the car parts in an electric vehicle are high-end, the most expensive of which is the lithium-ion battery. Therefore, their repair or replacement cost is also higher, resulting in higher insurance premiums.

EVs, backed by advanced and premium technology, still lack efficient mechanics to compensate for their losses. Therefore, only authorized centers can repair EVs, whereas conventional cars can be repaired at local garages for minor damages. Thus repair costs for EVs are high, which increases insurance costs

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