Considering electric vehicle Insurance? Here's what to keep in mind before choosing covers

Insurance for EVs: As electric vehicles (EVs) gain increasing traction across the nation, securing comprehensive insurance coverage for these environmentally friendly cars has become imperative. The insurance landscape reflects the unique nature of EVs, with the cost of coverage generally higher compared to conventional fuel-powered vehicles.  Notably, insurance providers have adapted to this shift, offering EV-specific policies to cater to the distinct needs of these vehicles.

Companies like HDFC Ergo, Bajaj Allianz and Magma HDI provide comprehensive coverage for EV owners, with add-ons specifically designed for electric and hybrid vehicles.

Which aspects influence EV coverage choices?

When insuring an EV, key considerations include the focus on essential components like the battery, electric motor, and charging setup. As EVs tend to be pricier than traditional cars, the Insured Declared Value (IDV) is higher, resulting in elevated insurance premiums. In addition to standard coverage, EV insurance often encompasses extra protection for charging equipment, battery warranties, and safeguarding against environmental hazards.

Operational aspects such as charging station compatibility and voltage fluctuations are also factored into the insurance process. Some companies offer coverage for privately-owned charging stations, charging cables, connectors, adaptors, and other standard accessories, protecting against common mishaps like fire, theft, and accidental damage.

Several insurance providers, including HDFC ERGO and ACKO, offer diverse electric car policies covering third-party liability, natural and human-induced calamities, accidental damages, theft, and personal accident cover. Magma HDI's Battery Secure add-on addresses concerns about battery failures due to accidents, offering financial protection against unforeseen power surges, water ingress, or short circuits.
 

Diverse policy options

Sanjeeb Rout of National Insurance Company emphasised that EV insurance policies, much like regular motor insurance, come in two types – Third Party Insurance and Comprehensive Insurance. There are also options for Pay-As-You-Drive insurance plans, catering to those who drive less. The difference lies in add-on covers, providing enhanced protection for EV-specific components.

Regarding premiums for third-party car insurance policies for EVs, the Insurance Regulatory and Development Authority of India (IRDAI) has proposed discounts, with base premium rates suggested for different power categories. Looking ahead to FY24, IRDAI aims to establish fair and appropriate coverage, reflecting the evolving landscape of EVs in India.

Rout recommends considering covers that provide enhanced protection for EV batteries, including extended warranty, coverage for consequential losses, and damage caused by water. Engine protection covers are essential, addressing electrical system failures, wiring damage, and motor burnout costs. As EVs heavily rely on sensors and cameras, protection against damage to these sensitive components is crucial, and the insurance industry is expected to offer more relevant add-on coverage as EV practices mature in India.