EVs are becoming more attractive to consumers as their cost declines and new models are released. However, climate change is the biggest single driver behind the push for EV sales going forward.
There has been a pick-up in the sales of electric vehicles (EV) in India in the last few years. Even in global markets, EVs have been in range and in the years to come, a large number of people will shift from conventional cars (petrol and diesel) towards EV. Currently, premiums rates for EV are less by 10-15% compared to diesel and petrol, but rates are going to be hardened going forward.
Just like any other vehicle, even an EV needs insurance as it offers financial protection against damages to your vehicle caused by accidents. The insurance also covers you against liabilities arising from any property damage, fatality, or injury caused to another person in accidents involving your car.
Currently, a vehicle exceeding 65-kilowatt capacity (KW) costs insurance premiums of around 6,700. While for 30-65 KW it costs Rs 2,700. On other hand, third party premiums come in the range of Rs 3,211 for a 100-1500 cc vehicle.
In developed markets, EVs are becoming more attractive to consumers as their cost declines and new models are released. However, climate change is the biggest single driver behind the push for EV sales going forward.
There are three main types like battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs). BEVs, also known as all-electric vehicles, rely 100% on battery power, while PHEVs and HEVs supplement electric power with conventional combustion engines.
In Indian like other vehicle insurance, citizens are legally bound to hold at least a third-party vehicle insurance to be able to drive on public roads. This stipulation is under the Motor Vehicle Act, 1988. Driving without insurance is a violation of the law.
Having a car insurance policy can offer much-needed financial help when a vehicle is met with an accident. The insurance covers you against damages caused by accidents, natural calamities, acts of violence, and more. A comprehensive insurance policy also safeguards you from losses due to theft.
With your electric car insurance policy, just like with all regular car insurance policies, you get third-party insurance, which is mandated by law in India. However, still, EV insurance is on the nascent stage in India.
But as the sales improve, the premiums might go up going forward as value and spare parts prices go up. As we have seen certain spare parts of EV are costlier when compared to traditional cars and repair work for electric cars is also costly. Repair work for electric cars can only be done by technical experts.
Even now there are a lack of skilled technicians in India and if an accident happens and the components of your electric car require repair, there is a possibility that policyholders may not get the parts easily or skilled technicians may not be easily available. All these factors can lead to higher premiums for EV going forward.
Finally, a car insurance policy is a must, whether one buys petrol, diesel, or electric car. By paying a small premium, a policyholder can buy protection against unforeseen events in the future.
by, Rakesh Goyal, Director, Probus Insurance