Motor insurance for electric car: Which insurance plan to buy for electric cars?

How to opt for the best car insurance for your electric car? Is it similar to a regular plan or different?

Planning to buy an electric car? How is the insurance different from that of a regular car?

With traditional sources of energy depleting rapidly, electric vehicles are becoming popular. The market for electric vehicles is expected to grow at 26.8% CAGR by 2030. The setting up of infrastructure to accommodate electric vehicles is also underway. Many people are expected to eventually move from a petrol or diesel car to an electric vehicle in the years to come.

Motor insurance for electric vehicles

Motor insurance safeguards your car from potential financial risk. However, there are no specialised car insurance plans for e-vehicles yet. A regular car insurance plan provides coverage for a normal car as well as an electric vehicle or a hybrid one.

There are two major types of car insurance plans in India. 

  • Third-party liability: It is legally mandatory to cover third-party damage under the Motor Vehicles Act, 1988. It protects the owner from all legal liabilities to any damage or injury to a third party (either person or property). 
  • Comprehensive plan: A comprehensive plan covers all third-party legal liabilities as well as own vehicle damages. This is the most common type of car insurance plan as there is a wide range of add-on covers that can enhance the coverage and allow the policyholder to customise the plan.

However, for a new electric car, you need to mandatorily opt for a bundled car insurance plan with 3 years of third-party coverage and one year of own damage coverage. You also have the option to buy a motor insurance plan for your e-vehicle with or without battery coverage, as it might account for 40%-60% of the total insurance cost!

Related: Comprehensive car buying guide for this festive season

Key differences between electric cars and conventional cars

Though an electric vehicle may look similar to a petrol-powered vehicle, its internal engineering is entirely different. While conventional cars run on petrol or diesel, electric vehicles run on electrical energy. So, the cost of operating an electric vehicle is lower than a conventional one. 

However, the price of an electric vehicle is slightly higher than a conventional one, other features being the same. However, the premium for third-party coverage for electric cars is being lowered by the IRDAI as a promotional offer to incentivise people to opt for electric or hybrid vehicles.

Secondly, in regular motor vehicles, the fuel is stored in tanks. Electric vehicles need a heavy-duty battery to run, which is way costlier than a fuel tank. However, the charging infrastructure for electric vehicles still has a long way to go, in comparison with petrol pumps, which are common across the country.

Another significant difference you will see between a regular car and an electric vehicle is the maintenance cost. As the parts of an electric vehicle are not yet readily available in the market, they are costlier. The repair or maintenance cost is also high as there is a lack of skilled technicians. This calls for good insurance coverage, which can meet the cost incurred for repair and replacement of parts in case of an accident or other damage.

Moreover, the controller for speed and acceleration in electric vehicles costs more than the carburettor in fuel-operated cars. In fact, most parts of electric vehicles are expensive.

Related: Tax benefits on e-vehicles: How to avail it?

Last words

Given the government’s focus on promoting e-vehicles in India, the major automobile manufacturers have stepped up production. The charging infrastructure too, are being improved across the country. Since electric cars look set to catch on, there could be specific car insurance plans introduced by the IRDAI.

Electric cars are the future without a doubt, but maintaining them properly without ruining your finances requires you to choose good car insurance. The coverage needs to be enough to cover the cost of maintenance of these new-age vehicles.



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