Electric Car Insurance: A Complete Guide

The modern world has become increasingly conscious of its environmental footprint, which is why the transition to electric vehicles (EVs) has become a global imperative. Like many other countries, India is fast becoming a hotbed for electric car adoption. With time, the streets of India’s bustling cities can be seen welcoming a growing fleet of electric vehicles and showcase a transformational shift in the automotive landscape. Besides this, there is the government’s unwavering commitment to reducing carbon emissions and combating air pollution, making electric cars have become a pivotal tool in this quest. For instance, policies such as the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme have been instrumental in incentivizing electric vehicle adoption, driving significant growth in the market.

According to a reliable data source, EV penetration in the automotive industry stood at 2.5% in May 2023. The electric vehicle sales in the country have also witnessed a substantial surge, in the financial year 2022-23. This remarkable growth is fueled by the increasing awareness of environmental concerns, advancements in EV technology, and an evolving charging infrastructure. As electric cars become increasingly accessible and affordable, more Indian consumers are likely to opt for electric mobility.

As the chorus of electric cars hums to life, one critical aspect often overlooked in the excitement of greener transportation is electric car insurance. Just like their conventional counterparts, electric cars require insurance coverage, but the specifics differ in several key ways. To help you navigate this evolving landscape, we’ve created a comprehensive guide to electric car insurance in India. It has been structured to empower you with the knowledge you need to protect your investment and embrace the future of mobility confidently.

What is Electric Car Insurance?

Electric car insurance, also known as Electric Vehicle (EV) insurance, is a specialized type of motor insurance that is designed to cater to the unique needs and characteristics of electric cars. Like conventional cars, electric cars in India are legally required to have insurance coverage to operate on public roads. However, there are significant differences between insuring an electric car and a traditional gasoline or diesel-powered vehicle.

Here are the key components that define electric car insurance in India:

• Coverage for electric components

Electric cars have distinct components, such as the battery pack and electric motor, that require coverage. These components can be expensive to repair or replace in the event of an accident, which is why it’s crucial to ensure they are adequately covered in your insurance policy. 

• Specialized repair and service centers

Electric vehicles often require specialized service for repairs/maintenance. Your insurance policy may recommend or require you to use certified electric car service centers or mechanics, which can influence your choice of repair facilities.

• Premiums reflecting EV value

The cost of insuring an electric car may differ from that of a traditional vehicle. Insurance premiums are typically based on the value of the vehicle, and electric cars, especially high-end models, can have a higher sticker price. This can affect your insurance premiums, which is why it’s essential to consider this when budgeting for electric car ownership.

• Consideration of charging infrastructure

Electric vehicle insurance may also take into account the availability of charging infrastructure in your area. Areas with ample charging stations and a supportive charging network may be viewed more favorably by insurance providers and can potentially lead to lower premiums.

• Environmental benefits

Some insurance companies may offer discounts or incentives for electric car owners due to the vehicle’s reduced carbon footprint. This is a reflection of the environmental benefits associated with electric vehicles, including lower greenhouse gas emissions.

• Battery degradation coverage

Over time, electric car batteries can degrade, the result of which will affect the vehicle’s range and performance. Some insurance policies may offer coverage for battery degradation that can help you address potential issues with your car’s battery pack.

• Coverage for charging equipment

If you install home charging equipment or use public charging stations regularly, it’s essential to check that your insurance policy covers any potential damage or liability related to these charging systems.

What are the Benefits of Electric Car Insurance?

Buying a suitable electric car insurance policy in India offers several distinct advantages tailored to the unique needs and characteristics of electric vehicles. Here are some of its key benefits:

1. Coverage for expensive electric components

Electric cars have sophisticated and costly components, such as the battery pack and electric motor. Electric car insurance generally ensures these components are adequately covered in the event of damage, malfunction, or theft, saving you from hefty repair or replacement costs.

2. Customized coverage option

Most of the EV insurance policies are designed to cater to the specific needs of EV owners. You can typically choose from various coverage options – third-party liability or comprehensive car insurance, to tailor your policy to your vehicle’s requirements. This flexibility ensures that you have the right level of coverage for your electric car.

3. Environmental benefits

Insurance companies may offer eco-friendly discounts or incentives to electric car owners by recognizing the reduced carbon footprint of electric vehicles. By driving an EV and insuring it with a renowned provider that values sustainability, you can contribute to a greener future and potentially enjoy reduced insurance premiums.

4. Lower operating costs

Electric cars are known for their lower operating costs compared to gasoline or diesel vehicles. Electric car insurance providers may take these cost savings into account and ask for competitive premiums that align with the overall affordability of electric vehicle ownership.

5. Enhanced safety features

Many electric cars come equipped with advanced safety features and driver-assistance systems. This is why electric car insurance policies consider these safety enhancements when determining premiums. This can potentially lead to lower insurance costs for EV owners.

6. Peace of mind

Owning an electric car is a significant investment. With electric car insurance by your side, you benefit from peace of mind by safeguarding your financial interests. You can drive with confidence, knowing that you are protected in the event of accidents, theft, or other unforeseen circumstances.

7. Access to EV expertise

Electric vehicle insurance providers often have a deep understanding of electric vehicle technology, maintenance, and repair needs. This expertise can be invaluable when you need assistance with your electric car or filing insurance claims.

What is Covered Under an Electric Car Insurance Policy?

When you purchase a car insurance policy in India, you can expect coverage for various aspects and scenarios unique to electric vehicles. Here are the key inclusions typically found in such a car insurance policy:

• Liability coverage to cover bodily injury or property damage that you may cause to others in an accident while driving your electric car
• Comprehensive coverage to provide protection against non-collision-related incidents, such as theft, vandalism, natural disasters, and falling objects, which can damage your electric car
• Collision coverage covering repairs to your electric car in case of collision with another vehicle or object, regardless of fault
• Battery coverage to provide coverage for the battery pack, which is a critical and expensive component of your electric vehicle
• Charging equipment coverage for damage or liability associated with the charging infrastructure
• Legal expenses coverage for legal expenses in case you need to defend yourself or file a lawsuit related to an accident involving your electric car
• Emergency assistance including roadside assistance and emergency services in case your electric car breaks down or you run out of charge
• Accessories coverage for electric car-specific accessories, such as charging cables, specialized tires, or customized equipment 
• Optional add-ons such as zero depreciation, key replacement, and consumables coverage, which you can customize to suit your needs and preferences
• No Claim Bonus (NCB) to reduce your premiums when you renew your electric car insurance policy

Also Read: NCB in Car Insurance – Explained

What is Not Covered Under an Electric Car Insurance Policy?

While electric car insurance policies cover various situations, they also come with specific exclusions. It’s important to understand these exclusions to avoid unexpected gaps in coverage. 

Here are some of the most common exclusions in electric vehicle insurance policies:

• This type of insurance typically does not cover damage resulting from regular wear and tear, aging, or gradual deterioration of your electric car’s components.
• Some policies may exclude coverage for damage that occurs as a consequence of a non-covered event. For example, if your battery fails due to wear and tear, resulting in an accident, the resulting damages may not be covered.
• Any damage or loss incurred while using your electric car for illegal activities, such as racing or other unlawful purposes, is typically not covered.
• If you make unauthorized modifications or alterations to your electric car, any damage or losses resulting from these changes may be excluded from coverage.
• Most policies do not cover damage incurred while participating in competitive events, such as racing or rallies.
• Damage intentionally caused by you or anyone else is not covered under your policy.
• If you drive your electric car without a valid driver’s license or while under the influence of alcohol or drugs, any resulting accidents or losses may not be covered.
• If you take your electric car outside the geographical territory specified in your policy without the necessary extensions or endorsements, you may not be covered.
• If you use your electric car for commercial purposes without the appropriate coverage, damages or losses related to commercial activities may be excluded.
• Some EV insurance policies exclude coverage for damages caused by acts of terrorism, war, or other similar events.
• If an unauthorized driver, not listed on your policy, is involved in an accident while driving your electric car, it may not be covered.
• Using your electric car for rental purposes without the appropriate commercial or rental coverage can lead to exclusions in your electric vehicle insurance policy.

Disclaimer: 

It’s essential to read and understand the terms and conditions of your electric car insurance policy carefully, including the inclusions and exclusions. If you have questions or concerns about specific scenarios or coverage limitations, consider discussing them with your insurance provider to ensure that you have a clear understanding and can make informed decisions regarding your electric car insurance.

IRDAI-Approved Rates of Third-Party Electric Car Insurance Premium

The Insurance Regulatory and Development Authority of India (IRDAI) serves as the overarching authority and regulator overseeing the insurance industry within the country. One of its significant responsibilities involves determining and communicating the insurance rates applicable to electric vehicles’ mandatory third-party electric car insurance in India.

In the case of EVs, the IRDAI has established a policy offering a 15% discount on third-party insurance premium rates when compared to those for conventional petrol and diesel vehicles. The subsequent table illustrates the pricing structure for one-year and three-year policies for third-party electric car insurance rates concerning private electric vehicles:

(Source)

What are the Add-Ons for Electric Car Insurance?

In addition to the standard coverage provided by an electric car insurance policy, insurers often offer optional add-on coverages that you can include for enhanced protection. These add-ons allow you to customize your insurance plan to better suit your specific needs and preferences. Here are some common add-ons you may consider for your EV insurance:

• Zero depreciation cover

This add-on ensures that the insurer covers the full cost of repairs or replacement without factoring in depreciation in case of damage or loss of your vehicle. It’s particularly beneficial for protecting the value of your electric car and its components.

• Roadside assistance

Electric vehicles rely on charging infrastructure. If you run out of charge or face charging-related issues, this add-on provides roadside assistance. It covers services such as towing, jump-starting, and emergency charging to get you back on the road.

• Key replacement

If you lose your electric car’s keys or they are stolen, this add-on covers the cost of replacing them, including reprogramming the vehicle’s security system.

• Consumables coverage

Electric cars have components that need regular replacement. This coverage reimburses you for the cost of these consumables during repairs.

• Motor protection

While electric vehicles don’t have conventional engines, they have electric motors that can be damaged. This add-on covers the motor and related components against damage.

• Return to invoice cover

If your electric car is declared a total loss due to an accident or theft, this add-on ensures that you receive the original invoice price of the vehicle, thus helping you replace it with a new one.

• NCB protection

This add-on safeguards your No Claim Bonus (NCB) even if you make a claim. It prevents the loss of accumulated NCB, which can result in a discount on future premium payments.

• Personal accident cover

While personal accident cover is often included in standard policies, you can enhance it with higher coverage limits or additional features to ensure comprehensive protection for yourself and your passengers in case of injury or fatality.

• Loss of personal belongings

If personal items are stolen or damaged while inside your electric car, this add-on provides coverage for their replacement.

Before adding any of these optional coverages to your electric car insurance policy, you must carefully evaluate your specific needs, budget, and the value of your electric car. Discuss these options with your insurance provider to understand the change in the electric car insurance costs with add-ons. This way, you can ensure that you choose the ones that offer the most meaningful protection for your electric vehicle.

Recommended Read: How to Use a Car Insurance Calculator?

How to Compare Electric Car Insurance Policies?

Comparing electric car insurance policies is a crucial step in securing the right coverage for your specific needs. Here are the steps you can follow to effectively compare electric vehicle insurance policies in India:

Step 1: Identify your needs

Determine your insurance requirements based on factors like your electric car’s value, your budget, and your driving habits. Consider whether you need coverage for the battery, charging equipment, or specific add-ons.

Step 2: Gather required information

Collect essential information about your electric car, such as its make, model, year of manufacture, and any aftermarket modifications. Additionally, gather your personal information, including your driving history and requirements.

Step 3: Research insurers offering electric car insurance

Create a list of reputable insurance companies in India that offer EV insurance policies. You can gather recommendations from friends, family, online electric car insurance reviews, or consult with insurance agents.

Step 4: Use online comparison tools

Utilize online insurance comparison websites and tools to get quotes from multiple insurers simultaneously. These tools can provide a quick overview of available policies and their estimated costs. Besides this, you can also check the difference between new EV car insurance premiums vs. old EV insurance premiums.

Step 5: Review coverage options

Carefully review the coverage options offered by each insurer. Check whether they include coverage for the battery, charging equipment, or specific electric car-related features. Ensure that the coverage aligns with your needs and preferences.

Step 6: Consider premium variations

Compare the electric car insurance rates for different policies, taking into account your budget and the level of coverage you require. Be sure to understand how the premiums are calculated, including any discounts or surcharges.

Step 7: Check deductibles

Assess the deductibles associated with each policy. A higher deductible can lower your premium but may result in higher out-of-pocket expenses in the event of a claim. Ideally, you should choose a deductible in car insurance that aligns with your financial comfort level.

Step 8: Explore discounts if any

Inquire about available discounts, such as those for safe driving, anti-theft devices, or bundling multiple insurance policies with the same provider. These discounts can help reduce your insurance costs.

Step 9: Examine add-ons

Evaluate the optional add-ons offered by each insurer. Consider which ones provide valuable coverage for your electric car and whether their costs are justified.

Step 10: Read policy terms and exclusions

Thoroughly read the policy documents and pay close attention to terms, conditions, and exclusions. Understand what is covered and what is not, as well as any limitations or restrictions.

Step 11: Check customer service and claims process

Research the reputation of each insurer’s customer service and claims processing. Timely and hassle-free claims are essential when you need assistance.

Step 12: Seek recommendations

Consult with friends, family, or online insurance information portals to gather recommendations and insights from other electric car owners who have experience with specific insurance providers.

Step 13: Request customized quotes

Reach out to insurance agents or representatives directly to request customized quotes based on your specific electric car and coverage needs. Discuss any questions or concerns you may have about electric car insurance coverage.

Step 14: Review and compare EV insurance plans

Compile all the information you’ve gathered and create a detailed comparison chart or document. This will help you visualize the differences between policies to make an informed decision.

Step 15: Ask for clarifications

If you have any doubts or need clarifications about a policy’s terms, coverage, or costs, don’t hesitate to contact the insurer directly for explanations.

Step 16: Make an informed policy selection

After thorough research and comparison, choose the electric car insurance policy that best aligns with your needs and budget.

How to Buy Electric Car Insurance in India?

Whether you prefer to buy electric car insurance online or through traditional offline channels, the process involves several key steps. Below, we have outlined the steps for both online and offline methods.

Steps to buy electric car insurance online

1. Start by researching and comparing electric car insurance policies from various insurers online. Use insurance comparison websites and tools to get quotes and review policy details.
2. Choose an insurer that offers a policy tailored to your electric car’s needs and your preferences.
3. Visit the insurer’s official website to explore policy options and initiate the purchase process. You can also buy the policy through online insurance aggregator portals.
4. Enter details about your electric car, including its make, model, year of manufacture, and any modifications or aftermarket accessories. 
5. Choose the coverage options that suit your needs, such as third-party liability, comprehensive coverage, and any optional add-ons like zero depreciation or roadside assistance.
6. Adjust deductibles and coverage limits based on your preferences and budget. Keep in mind that higher deductibles can lower the electric car insurance cost but may result in higher out-of-pocket expenses in case of a claim.
7. Input your personal information, including your name, contact details, date of birth, and occupation.
8. Carefully review the policy terms, conditions, and premiums displayed on the insurer’s website. Ensure that the details align with your requirements.
9. If you qualify for any discounts (e.g., safe driving, no claim bonus), apply them to reduce your premium.
10. Fill out the application form provided on the insurer’s website. Double-check all the information for accuracy.
11. Pay the premium online and ensure that you receive payment confirmation and policy documents via email.
12. Once your payment is processed, you will receive the electric car insurance policy documents electronically. Save these documents for future reference.
    

Steps to buy electric car insurance offline

1. Locate insurance agents or brokers in your area who offer electric car insurance from reputable insurers. You can find them through referrals, directories, or by visiting insurance company branches.
2. Contact the insurance agent or broker to schedule an in-person meeting or consultation. This allows you to discuss your specific insurance needs and preferences.
3. During the meeting, the agent will present different electric car insurance policy options, including coverage details, premiums, and available add-ons.
4. Furnish information about your electric car, such as its make, model, and any modifications. Also, share your personal details as required by the insurer.
5. Work with the agent to customize your insurance policy based on your requirements, including coverage options, deductibles, and add-ons.
6. Carefully review the terms and premiums associated with the selected policy. Ask the agent any questions you may have about the policy’s details.
7. Inquire about any discounts you may be eligible for and ensure they are applied to reduce your premium.
8. Fill out the insurance application form provided by the agent. Verify that all the information is accurate.
9. Pay the premium to the insurance agent through your preferred payment method.
10. Once the payment is processed and your application is approved, you will receive a physical copy of your electric car insurance policy along with relevant documents.

How to Renew Electric Vehicle Insurance?

Renewing your electric car insurance is a crucial responsibility to ensure continuous coverage and legal compliance on the road. Here are the generic steps you need to follow to renew the insurance policy in India:

1. Before your current insurance policy expires, review its terms, coverage, and add-ons. This will help you assess whether the policy still meets your needs or if you’d like to make any changes.
2. Take the opportunity to compare insurance policies from different providers. You may find a better deal or more suitable coverage for your electric car.
3. Collect all the necessary information, including your existing policy details, vehicle Registration Certificate (RC), and personal information, such as your driver’s license and contact details.
4. Reach out to your current insurance provider well before the policy expiration date. You can do this through phone, email, or by visiting their local office.
5. Ask your current insurer for a renewal quote for your electric car insurance. They will provide you with details on the premium amount and any changes to the policy terms.
6. Carefully review the renewal quote to ensure it aligns with your coverage needs and budget. Pay attention to any changes in premiums, deductibles, or coverage options.
7. Ask your insurer about any available discounts, such as NCB that may apply to your policy renewal.
8. If you have made any modifications to your electric car, inform your insurer and ensure that these changes are covered under the renewed policy.
9. If you wish to make adjustments to your coverage, such as adding or removing add-ons or changing the deductible amount, discuss these changes with your insurer and request them as needed.
10. If there have been any changes in your personal information, driving habits, or the use of your electric car, inform your insurer so that they can update your policy accordingly.
11. Once you are satisfied with the renewal terms and quote, make the premium payment to your insurer. You can typically pay online through the insurer’s website, by visiting their local office, or via online insurance aggregator platforms.
12. After your payment is processed, your insurer will provide you with renewed EV insurance policy documents. These will serve as proof of coverage and should be kept in your vehicle at all times.
13. Safely keep the renewed policy documents and any receipts related to the premium payment in a secure location. You may also want to keep digital copies for easy access.

How to File a Claim Under Electric Car Insurance in India?

Filing a claim under your electric car insurance in India is a critical step when you encounter an accident, damage, or loss. Here’s a step-by-step guide on how to file a claim effectively:

1. In case of an accident or damage, prioritize safety. Ensure that everyone involved is safe, and if needed, provide medical assistance. Contact the local authorities to report the incident, and request a copy of the First Information Report (FIR) if applicable.
2. Collect relevant details from the scene, such as the names and contact information of all parties involved, vehicle registration numbers, and insurance information of the other parties. Additionally, take photos or videos of the accident scene and any damages to your electric car as evidence.
3. Notify your insurance company about the incident as soon as possible. Most insurance companies have a 24/7 claims helpline that you can call. Provide all the necessary information, including your policy number, the date, time, and location of the incident, and details about the other parties involved.
4. If the incident involves a major accident, injury, or theft, you may need to file an FIR at the nearest police station. Provide a copy of the FIR to your insurer as part of the claim documentation.
5. Your insurer will provide you with claim forms that need to be filled out. These forms will require information about the incident, the damage to your electric car, and any injuries sustained. Along with the claim forms, you’ll need to submit supporting documents, which may include copies of your driving license, vehicle RC, insurance policy, FIR, repair estimates and bills from the authorized repair center, etc. 
6. Your insurer may send a surveyor to assess the damage to your electric car. Cooperate with the surveyor, provide all necessary information, and answer any questions they may have.
7. Depending on the extent of the damage, take your electric car to an authorized repair center recommended by your insurer. Electric cars may require specialized repair facilities with trained technicians familiar with EV technology.
8. Your insurer will review the details and documentation provided. Once your claim is approved, you’ll receive a settlement offer, which may include repairs, replacements, or a payout depending on the nature of the damage and your policy terms.
9. If you agree with the settlement offer, sign the necessary documents, and your insurer will initiate the payment or repair process. If you have opted for cashless repairs, the insurer will directly settle the bill with the repair center.
10. Stay in touch with your insurer for updates on the progress of your claim until it is fully settled. If you have any concerns or questions, don’t hesitate to communicate with your insurer’s claims department.

Electric Car Insurance FAQs

Do I need to carry a PUC certificate along with electric car insurance?

No, it’s not mandatory to carry a Pollution Under Control (PUC) certificate for your electric car, like the insurance policy, as per regulations.

Is it mandatory to buy comprehensive EV insurance?

While comprehensive insurance isn’t mandatory, it’s highly recommended for the coverage it offers, especially considering the value of electric cars and the potential costs of repairs or replacements.

Is it expensive to insure my electric car?

The cost of insuring an electric car can vary based on factors like the car’s value, location, coverage, and driving history. However, electric car insurance may have higher premiums due to the cost of specialized components.

Is motor insurance required for electric cars in India?

Yes, all motor vehicles, including electric cars, must have valid insurance coverage as per Indian law.

How much does electric car insurance cost?

The cost of electric car insurance depends on several factors, including the car’s make, model, value, location, coverage, and your driving history. It can vary widely, so it’s advisable to obtain quotes from multiple insurers for accurate pricing.

Why is EV insurance costlier than petrol or diesel car insurance?

Electric car insurance may be costlier due to the high value of electric vehicle components like the battery. Additionally, the relatively new technology and specialized repair requirements can impact premiums.

How can I find the best car insurance for electric vehicles?

To find the best insurance for your electric car, compare policies from different insurers, consider coverage options, inquire about discounts, and choose an insurer with a strong reputation for customer service and claims processing.

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