Since electric cars are more practical and economical, more and more people prefer to purchase them. Despite providing tonnes of benefits, electric cars are still more expensive to insure than those powered by diesel or gasoline.
But why are insurance costs for electric vehicles higher than for conventional vehicles?
Continue reading to find out the reasons!
Electric Car Insurance Costs In India
To encourage the adoption of environmentally friendly EVs, IRDAI has offered third-party motor insurance prices for EVs at a 15% discount from rates for petrol- or diesel-powered private cars. According to the vehicle’s battery capacity, the rates for third-party electric car insurance are listed below.
|Battery Capacity||Premium Rate For 1 Year||Premium Rate For 3 Years|
|> 65 Watt||Rs. 6,707||Rs. 20,659|
|> 30 Kilowatt & < 65 Kilowatt||Rs. 2,738||Rs. 8,104|
|< 30 Kilowatt||Rs. 1761||Rs. 4493|
It is also important to note that the premium rates for electric car insurance can vary from one insurer to the other.
Reasons Why Electric Car Insurances Are Costly
The price of insurance premiums for electric cars is influenced by several factors. Here are the main causes why electric car insurance is costly:
- Electric Cars Are Expensive
One of the most important reasons why electric car insurance premiums are higher is that the purchasing cost of electric cars is higher than petrol- or diesel-powered cars. Electric cars are equipped with cutting-edge technology, including sophisticated parts, high-capacity batteries, and more. Since the cost of an electric car is higher, it results in higher IDV (Insured’s Declared Value) and, thus higher premiums.
- Battery Replacement Or Repairment Of Electric Cars Are Costly
Although electric cars have the latest technological car parts in comparison to petrol- or diesel-powered cars, the most expensive component is the lithium-ion battery. Replacing or repairing these batteries can prove costly, which rationalizes why electric car insurance premiums are higher.
- Requires High Maintenance
Due to their expensive and intricate parts, electric cars require a lot of maintenance. Moreover, their repair and maintenance require specialized knowledge and abilities, which not all mechanics possess. The talent pool is currently smaller than it is for traditional car technicians. Due to the high cost of hiring a specialized technician, the labor cost for the repair or replacement may thus be greater.
- Supply Chain Issues
In India, not many individuals possess electric cars, which has led to many supply-chain and infrastructure-related issues. The availability of the raw materials needed to manufacture electric cars is restricted for businesses. These elements raise the cost of electric cars, which in turn raises the cost of their insurance policies.
Ways To Save On Electric Car Insurance
Here are some tips that you can follow to save on your electric car insurance:
- Purchase Online: Try purchasing electric car insurance online, as various online platforms allow you to compare different policies in the market. In this way, you will find affordable and suitable insurance for your electric car.
- Try Not To Raise Small Claims: If possible, try not to raise claims for minor damages to your electric car, as it hinders the possibility of getting a No Claim Bonus. Therefore, it is recommended to bear such minor expenses on your own and not use the insurance policy for it.
- Utilize Your NCB: You get a discount on the premium for not filing any claims during the policy period. For five years in a row without submitting a claim, the discount can reach 50%. You can reduce the cost of electric car insurance by using the accrued NCB.
- Install Anti-Theft Device: You can avoid potential vehicle theft by installing an anti-theft device. Some insurers may lower the cost because you’re attempting to lessen the likelihood of vehicle theft. Consequently, adding an anti-theft device can lower the cost of insurance.
- Choose Voluntary Deductibles: A voluntary deductible is a set sum of money you voluntarily decide to fork over when filing claims. The voluntary deductible limit option reduces the claim liability. As a result, you get a discount on the premium.
Automobile manufacturers are working hard to build and supply affordable electric cars for the common person, despite the fact that EVs are still expensive to insure. As electric cars will become more affordable, the cost of insurance will also go down.
Whether it is pricey or not, having your electric car insured will assist you in avoiding facing financial hardship if there are any third-party obligations or car damages. Always make sure your electric vehicle is insured to prevent unplanned financial losses.