​The new-age revolution in the automobile industry is electric cars or electric vehicles (EVs) as potential alternatives to traditional petrol cars.

India's EV industry is still picking up pace and popularity to match the rising awareness among vehicle owners regarding the need for environmentally friendly commute options. Due to the limited supply to meet the increasing demand, the costs of investing in electric car insurance are higher.

In this detailed blog, we will explain the reasons behind the current electric vehicle insurance cost in India.

Aspects that Impact the Electric Vehicle Insurance Cost

While electric vehicles help promote a cleaner future, the cost of insuring your EV with the necessary EV car insurance can be an expensive affair.

This is because multiple factors impact the average insurance cost for electric cars, and it is crucial to understand these aspects to get a clear estimate regarding your chosen EV insurance cost.

Here is a detailed description of each of the potential factors:

Expensive Replacement and Repair Costs

Similar to how petrol cars rely on their engines to drive around without any hassle, electric vehicles require top-quality batteries for efficient performance.

However, the cost of replacing or repairing these EV batteries, along with the other components of the EVs,

is very high. This results in a more significant financial burden for the insurers.Thus, to protect your EV from damage or loss, they charge higher premiums to purchase their electric vehicle insurance for maximum safety.

Technology Expenses

All electric cars are developed using high-end and advanced technologies to ensure maximum efficiency and improved vehicle performance. These technologies include modern driving features, sensors, software systems, safety features, etc., that enhance your driving experience.

However, these additional technologies directly indicate a higher expense for repair and replacement, attracting a high electric car insurance cost for you.

High Performance = Higher Costs

Electric vehicles promise high-performance capabilities. However, this promise of enhanced performance comes at a higher purchase price for these electric cars.

So, when you take an EV on the road, this high performance can also translate into an increase in the potential risks of intense damage and loss for an insurance provider. Thus, the premium for an electric car insurance policy is higher.

Increased Risk of Theft

Electric cars have multiple advanced features and more efficient performance, making them more prone to theft due to their limited availability and higher market value. This increased potential of theft impacts the risk profile for electric vehicles, resulting in higher premiums for electric car insurance.

Low Supply of Skilled Mechanics

Given the evolving demand for electric vehicles, the availability of expert mechanics to fix car repairs and replacement requirements with proper technique is low. Thus, the limited pool of qualified mechanics drives up the EV car insurance cost as the repair time, expertise and costs involved with repairs will also be higher.

Limited Supply

The supply of EV batteries, raw materials and manufacturing capacity is limited, as some parts might not be readily available. Moreover, historical data for electric vehicles is also limited, which restricts an insurer to complete an assessment of the potential risks involved.

Thus, if you are making an electric car insurance comparison with petrol insurance plans, EV insurance plans are significantly more expensive due to these limitations.

Third-Party EV Car Insurance Cos

The Insurance Regulatory and Development Authority of India (IRDAI) is the key entity that decides on the fixed rate of a third-party car insurance policy for all vehicles, including electric vehicles.

The primary reason behind this is the mandatory traffic rule of insuring your vehicle with a third-party car insurance policy to drive anywhere in the country. For EVs, the third-party insurance rates include the following

Tips to Reduce your EV Car Insurance Cost

1. Compare different premium quotes from different insurers to find the policy that aligns with your budget and needs.

2. Install different safety features and anti-theft devices in your vehicle to reduce the risk of vandalism and theft and enjoy lower premiums.

3. Opt for a higher deductible as per your financial capacity to reduce the overall premium without compromising coverage.

4. Adjust your coverage carefully by selecting the necessary rider add-ons to meet your specific needs.

5. Maintain a good driving record as that reduces your risk profile and, in turn, ensures reduced premiums.

Conclusion

Electric cars are the future of the automobile industry. They offer high performance and, with their lower carbon emissions, promote increased sustainability.

You must know how to maintain an electric car with the necessary EV car insurance to avoid unnecessary financial burden in times of need. Moreover, to reduce the premium value and benefit from comprehensive coverage, you must compare plans and optimise your electric vehicle insurance cost using the tips mentioned above.

Reliance General Insurance offers a wide range of car insurance policies catering to the varying needs of car owners. These include mandatory third-party insurance, comprehensive and own-damage policies, pay-as-you-drive short-term car insurance and so on.

For increased convenience, we also offer a user-friendly website that allows you to buy or renew your car insurance online in just a few quick steps. Moreover, you can also compare different plans on our website to find the best fit.

Frequently Asked Questions

Does the type of electric vehicle impact the insurance premium?

Yes, the make and model of your electric car will significantly impact your EV car insurance cost. In addition, the purpose of the vehicle, the type of security devices installed and some other factors also affect the cost of EV insurance.

Will EV car insurance costs ever decrease in the future?

Due to the increasing awareness around sustainability and the growing demand for electric vehicles, the purchase price of these cars and their insurance policies may be lower.

However, this solely depends on the increased availability of expert mechanics with the right knowledge and other factors, like the supply of raw materials, a better network of garages and charging stations, etc.