EV Insurance Claims Cost 14% More Than ICE Cars: Policybazaar Data

Electric car insurance claims are costing more than those for comparable internal combustion engine (ICE) cars, according to data from Policybazaar. The average claim severity for electric cars stands at ₹41,543, compared with ₹36,185 for ICE cars, representing a 14% difference.

The comparison covers cars within their first three years of ownership and in a similar ₹10–15 lakh price bracket, while excluding large-loss claims. Policybazaar attributes the higher EV claim severity to the cost of battery systems, electronics, imported components and limited EV repair infrastructure.

The data also shows that around 80% of EV owners opt for at least two key insurance add-ons, including battery protection, zero depreciation, roadside assistance (RSA) and consumables cover. This compares with 77% among diesel car owners and 75% among petrol car owners. 

Battery Protection Cover Adoption Rises To 70%

Battery protection cover adoption among EV owners has increased from 51% to 70% over the past six months, according to Policybazaar. The company says the cover is intended to address risks including water ingress and power surges, subject to policy terms and conditions. 

Policybazaar's data also highlights the cost implications of damage to EV components beyond the battery. Battery cooling systems, electronics and infotainment systems can also involve higher replacement costs. The company notes that battery replacement can account for 40–50% of a vehicle's total cost, depending on the model. 

EV SUVs Record Highest Claim Frequency

Among EV body styles, SUVs recorded the highest claim frequency at 31 claims per 100 insured vehicles. Hatchbacks followed at 28, while EV sedans recorded 26 claims per 100 insured vehicles.

Based on these figures, EV SUVs had about 19% higher claim frequency than sedans, while hatchbacks were about 8% higher. Policybazaar links the difference to usage patterns and road conditions, with SUVs potentially seeing greater exposure to underbody, tyre and suspension damage, while hatchbacks may have greater exposure to traffic, parking and minor collisions in urban areas. 

Monsoon Raises Average EV Claim Severity By 25%

Monsoon conditions were associated with a significant increase in EV claim costs. Average claim severity rises to nearly ₹65,000 during the monsoon, compared with ₹52,000 during the rest of the year, a 25% increase.

Policybazaar attributes the seasonal increase to risks associated with flooding, waterlogging and adverse weather conditions.

East India Leads EV Claim Frequency

East India recorded the highest EV claim frequency among the regions covered, at 41 claims per 100 insured EVs. North India followed at 34, West India at 32, Northeast India at 30 and South India at 27.

This puts East India's claim frequency 52% above South India's. At the city-tier level, Tier-II cities recorded 33 claims per 100 insured EVs, compared with 30 in Tier-I cities and 27 in Tier-III cities. 

Policybazaar's Head of Motor Insurance, Paras Pasricha, said the claims data points to a different risk profile for EVs compared with ICE vehicles. He highlighted the higher average claim severity, the increase in battery protection adoption and the greater prevalence of multiple add-ons among EV owners.