Check this before buying insurance for your EV...

India is riding the all new mobility wave on electric vehicles, or as they are popularly called - EVs. Depicting a remarkable transition from apprehension to approval, EVs are definitely here to stay with the numbers vouching for it. And rightly so; after all, they do offer the prospect of a greener future by being a more environment-friendly as well as budget-friendly alternative to fuel-run vehicles. While EVs represent the changing consumer preferences and a shift in technological landscape, what still remains constant is insuring your vehicle.

 As EVs continue to gain popularity, it becomes even more important to be mindful of their insurance coverage, considering that third-party insurance is a legal requirement for all vehicles alike. However, to ensure maximum protection of an asset as important as this, you must think beyond this basic coverage and opt for comprehensive motor insurance which will provide coverage for your own car as well as a third party damage in case of an accident.

Whether you are on the fence about buying an EV or are already an EV owner, it’s essential to know all about the extent of insurance package and how you can make it better with available add-ons.

Listed below are some of the key points to consider before purchasing insurance for your electric vehicle.

Determine the suitable Insured Declared Value (IDV)

Insured Declared Value, or IDV, is a crucial term that car owners should understand in a policy. This basically represents the maximum coverage provided by the insurance company in case of theft or total loss. What’s important here is to not confuse IDV as your car’s market value. You need to choose your IDV based on the ex-showroom price of your car at the time of purchase.

Select the suitable Add-ons

As mentioned earlier, opting for a comprehensive insurance policy is advisable as it enhances overall protection. With additional add-ons, you can add an extra layer of safety with features that you need. Here are some add-ons you must consider for your EV.

Battery Protection cover

Battery cost is an important factor in purchasing an EV. This add on covers consequential losses suffered by the battery or the drive motor/ electric motor. It typically covers any losses resulting from water seepage or short circuits, provided the claim is admissible under the terms and conditions of the policy. However, it is advised to review the policy details as the coverage may vary for different insurance companies.

Zero depreciation coverage

Zero depreciation coverage ensures that the depreciation on your vehicle, which typically starts as soon as you purchase the car, doesn't affect your claim settlement. This add-on, often referred to as "bumper-to-bumper" or “nil depreciation” coverage, allows the insurance provider to settle the claim without factoring in the depreciation on car parts, resulting in a higher payable claim amount. Zero depreciation is recommended as it ensures that the insurance covers the complete claim cost apart from the deductible nominal processing charges. This is a popular choice among all vehicle owners alike.

Roadside assistance cover

Along with the many parts used to design an electric vehicle, it also has systems and functions, for instance, the charging port, batteries, etc., that would require trained mechanic assistance in case of a car breakdown. Hence, with this add-on, you can protect yourself from the hassle as the insurance provider provides 24/7 support for arranging a mechanic, towing the vehicle, providing an alternative conveyance, etc.

NCB protection cover

The No Claim Bonus (NCB) is a perk provided by insurance companies as an appreciation for maintaining your insured vehicle well without making any claims. A NCB protection cover add-on ensures that even in case of a claim, you don’t lose out on the NCB benefits. The NCB gets revoked even in the event of a small claim and this is where NCB cover comes to your rescue. You can file a claim and still have your NCB intact if you have this cover. For instance, if you have 20 percent NCB in your current policy and have opted for NCB protection cover as an add on, even in case of a claim, your NCB will not be fortified and you will be eligible for the NCB benefits next year at the time of renewal. The NCB benefit under this add-on is available only when the policy is renewed from the same insurer.

Protecting consumables

In general, a basic policy won’t provide coverage for consumables like fluids, oils, nuts, bolt etc, or damage occurring due to flood-related accidents. These damages can quickly add up and cause a significant financial strain. It’s wiser to invest in a consumables cover that will come to your rescue in such situations and take care of these expenses.

Claim settlement ratio

As much as it is essential to get the right insurance at the right price, it is equally necessary to verify the claim settlement ratio of the insurer. This basically denotes how often an insurance company pays out claims. A higher ratio signifies a better chance of your claim being approved, while a lower ratio implies more denials and decreased probabilities. Thus, always access an insurance company's financial statements to ascertain its claim settlement ratio.

After-sales service

Post-sales service is the assistance and support provided to customers regarding addressing any issues that may arise after the sale of the policy or at the time of filing a claim. So, look for an insurer that offers 24/7 customer service and a dedicated claims team. It is sensible to choose one provider that seems most accessible to you.

What is not covered under the new electric vehicle comprehensive policy

Motorcar insurance policies often come with exclusions. They outline the specific scenarios or circumstances where coverage does not apply. You should be aware of these before buying your policy. For instance, coverage does not extend to damages due to regular wear and tear or those resulting from reckless driving. Moreover, damages caused while driving with an invalid or expired license or under the influence of drugs, alcohol, or any other substances causing intoxication also falls under the exclusion radar.

How much does it cost to insure an EV?

The insurance cost for an electric car varies based on the engine power of the car. For vehicles exceeding 65 KW, a third-party insurance policy typically amounts to around Rs 6,712. For cars with 30-65 KW, it's about Rs 2,904, and for those below 30 KW, it comes to Rs 1,780. However, comprehensive insurance premiums vary across insurers based on the chosen plan and add-on covers.

Having a motor insurance policy for your EV is both legally binding as well as a financial safety net due to multiple liabilities. Consequently, before making a purchase, it's recommended to compare the available plans online, compare benefits, thoroughly understand the inclusions and exclusions, and, most importantly, consider the varying premiums offered by different insurers based on the chosen model and additional coverage options. Also, always read the fine print to review any potential hidden expenses before finalising the deal.

This blog was first published in Autocar Professional's December 15, 2023 issue.