Electric vehicle insurance: Coverage types, premium rates, claim process and more

Electric vehicles (EVs) are becoming increasingly popular in India given the fact that they are eco-friendly, cost-effective and require lower maintenance expenses. Now, as in any vehicle purchase, it's imperative to take an insurance policy for EVs too. An insurance coverage here can provide financial security in case of loss or damage caused to the vehicle.

Notably, having at least third-party car insurance is mandatory in India, which is the case in EVs too. Through this plan, users will be insured against liabilities arising due to third-party injury or damages to their property caused by the electric vehicle. Accidental damages to vehicle are, however, not covered under this policy. So, it's crucial that customers buy comprehensive policies which may provide coverage for both third-party and own-damage claims.

Insurance coverage of an EV is different from that of a non-electric vehicle. This is because EVs are more expensive than conventional cars. They may have a greater susceptibility to damage and their costs for repairs are also higher. Hence, insurance companies offer different insurance structures for them.

EV insurance usually covers liabilities like accidental damage, fire, natural disasters, riots, theft of the insured vehicle, and third-party injuries or property damage. New-age insurers provide all types of motor insurance products for new vehicles, such as standalone third-party cover, standalone own-damage cover, comprehensive cover, and bundled long-term cover.

The insurance cost of an electric scooter is almost equal to that of an ICE two-wheeler counterpart, while the insurance for an electric four-wheeler is slightly higher-priced than the conventional petrol/diesel/CNG vehicle. This is because electric vehicles run on batteries of great capability and the latest technology. The auto parts of these vehicles come costlier either for repair or replacement.

Comprehensive insurance policy premiums for EVs are relatively higher  compared to petrol and diesel variants due to higher repair costs and battery replacement costs. This is due to the advanced technologies used in EVs, which result in higher costs. Customers can, however, receive a 15 percent discount on third-party premiums, allowing them to obtain insurance for EVs at competitive rates but the cost of the car and the location of the policy will both affect the premium.

Since electric vehicles are relatively new in the market, the claim experience on these vehicles is too low for insurers to be able to price the product aggressively. The aftermarket is also much less developed compared to ICE vehicles, which means lower availability of aftermarket services, thus pushing up prices.

In cases where customers are using their electric car for short trips, a 'pay as you drive' motor insurance plan might be the best fit. Also, EV owners must compare quotes from different companies and ensure that they get coverage from companies which favour green drivers.

There are two ways in which owners can make an insurance claim for the electric vehicle. If they get the repairs done at a network garage, the advantage of cashless claims can be claimed. However, at a non-network garage, the owner would have to pay the bill upfront and then request reimbursement.