Know Why Electric Car Insurance Is Expensive

Know Why Electric Cars Insurance Is Expensive?

The Indian car industry has undergone significant changes, including a surge in electric vehicle adoption and advanced connectivity features. Many top brands now offer futuristic EV options, providing a variety of choices for potential buyers. Consider exploring these innovative offerings when purchasing a new car.

Car Insurance

As per the Motor Vehicles Act of 1988, all vehicles in India, including electric cars, must have insurance. Electric vehicle insurance differs from regular plans due to the unique features of battery-powered vehicles. The coverage is customized, but note that insurance costs for electric cars are typically higher than those for traditional petrol and diesel vehicles.

Why Is Electric Car Insurance Expensive?

Premiums for electric car insurance policies are more than conventional car insurance plans. Below you will find the reasons behind the high costs associated with electric car insurance:

Electric Cars Are Expensive To Buy

Electric cars are expensive compared to regular vehicles, and even the basic costing electric cars in India cost more than Rs. 10 lakhs. Due to the high value of electric vehicles, their Insured Declared Value (IDV) increases, increasing car insurance premiums.

Although the up-front cost of purchasing an electric car is higher, it is good to invest in it as it will help you to save on fuel costs and maintenance costs over the years.

Electric Car Parts Are Expensive

Electric cars are primarily expensive because their various components are costly. The car’s battery is the most expensive, which amounts to more than 60% of its value. Replacing or repairing these parts can be expensive, which is one of the reasons behind the high pricing of electric vehicle insurance.

Read more about – What Should You Buy Next: Electric Car or Petrol Car?

Batteries Have To Be Replaced

Electric cars pull their power from high-capacity batteries, which come with an expiry date, meaning they have to be chnaged after a certain period. These batteries are very costly, and replacing them may cost a few lakhs of rupees. Since comprehensive electric car insurance policies and electric bike insurance cover these costs, their premiums are higher.

High Labour Costs

Electric cars require high maintenance because of their costly and complicated parts. Not every mechanic can service or repair an electric vehicle; it demands specific knowledge and skills. Presently, the number of mechanics skilled in repairing electric cars is less in India than the traditional car mechanics.

Supply Chain And Infrastructure-Related Problems

Few people currently own electric cars in India due to several supply-chain and infrastructure-related problems. Companies need more support in terms of getting the raw materials needed for the manufacturing of EVs. These factors contribute to the high pricing of electric cars, and their insurance plans become expensive.

However, as more people start purchasing electric cars in India, EV manufacturers will invest in enhancing their infrastructure and supply chain. Hence, the price of car insurance for electric vehicles is expected to decline.

Although the cost of buying electric car insurance is higher, there are many advantages to purchasing an electric car. Some include low maintenance charges, freedom from fuel price hikes, and reduced pollution levels. *

* Standard T&C Apply

Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.