With the advancement of technology, more people are now shifting to electric cars instead of the traditional internal combustion engine (ICE) vehicles. Electric cars are designed to be more efficient and environmentally friendly than traditional cars, with their ability to produce lower emissions and lower fuel expenses.
So, let’s explore some essential factors before purchasing EV car insurance.
What is the Difference Between Electric and Conventional Car Insurance?
While electric and conventional car owners need to protect their cars against third-party liabilities and damages, there are significant differences in premiums, coverage, and add-ons for electric cars.
Higher Premiums
Insuring an electric vehicle tends to be more costly than insuring a gasoline or diesel vehicle. This is because the cost of obtaining spare parts, such as the battery and motor of an EV, is comparatively high. Moreover, the overall value of electric cars is usually higher than that of regular cars, thus raising the sum insured.
Specialised Coverage Options
Specific types of coverage, like battery protection coverage, may not be available in conventional cars. Certain insurers that work with electric vehicles extend extra options, such as charging equipment insurance.
Here are the 9 essential things to consider before purchasing an electric car insurance:
1. Consider Battery Coverage for Your Electric Car Insurance
The battery is considered one of the most important and costly subsystems in an electric car. It can cost between 30% and 40% of the total cost of the car; hence, proper battery protection is essential. When purchasing EV car insurance, one should ensure the policy will pay for the battery’s damage, theft, or malfunction.
Some insurance companies offer battery protection as an add-on to a comprehensive policy. This add-on can help pay for the battery repair or replacement if it is damaged in an accident, fire, or otherwise. Nevertheless, knowing what exclusions may apply, such as damage caused by wear and tear or improper usage, is important.
2. Look for Coverage for Charging Stations and Cables
Yet another area particular to electric cars is the necessity of charging apparatus-home charging points or charging cables installed in stations. A few insurance companies extend their services to ensure the loss, theft, or damage of charging cables and other equipment.
Charging Station Cover
If you have a home charging station, it may be important to check whether it is included in the policy; if it is installed outside your home, it is exposed to theft or destruction.
Portable Charging Cables
These can be expensive to replace and susceptible to theft, particularly when charged at well-publicised stations. Check if the available insurance policies extend to guarding your charging cables and other plans.
3. Check the Availability of Roadside Assistance for EV Vehicles
Traditional roadside assistance services often cater to internal combustion engine vehicles. However, electric cars can have different needs, such as assistance with battery recharging or towing to a charging station if the battery runs out.
Some insurers offer specialised EV roadside assistance, which may include:
- Towing to the nearest charging station in case of a battery discharge.
- Emergency recharging service.
- Assistance with flat tyres or other mechanical issues specific to electric vehicles.
Ensure that your insurance policy includes roadside assistance tailored for electric cars to avoid unexpected hassles while on the road.
4. Calculate Depreciation Rates for Electric Cars
Like any conventional car, the value of electric cars depreciates over time, directly impacting the Insured Declared Value (IDV) in the car insurance policy. However, there could be varied depreciation rates for electric vehicles compared to standard vehicles.
Battery Depreciation
The cost of batteries is considerably higher and can deteriorate faster than other depreciable assets, hence the IDV. Check how your insurer sets the IDV for electric cars and whether they allow changes to the IDV during policy revival.
Replacement Costs
As EV technology is still emerging, some components may degrade more quickly, which can affect repair and replacement costs, which subsequently determine depreciation.
5. Compare EV Car Insurance Specific Add-Ons
Insuring an electric vehicle might require specific add-ons unique to EVs. Apart from the standard coverage options like zero depreciation and engine protection (which may not be relevant for electric vehicles), look for the following EV-specific add-ons:
- Battery Protection: Covers repair or replacement costs for the battery.
- Charging Station Cover: Protects home or public charging stations against theft or damage.
- Charging Cable Cover: Insures against theft or damage to portable charging cables.
- EV-Specific Roadside Assistance: Ensures that the roadside assistance package is designed to meet the needs of electric vehicles, particularly related to battery issues.
6. Understand Government Incentives and Tax Benefits
Policies such as purchase incentives and tax exemptions for electric vehicles are common in many countries, including India. These benefits can extend to insurance to some extent. For example, some states offer incentives such as subsidies or even a reduced road tax for electric vehicles that, in turn, makes owning and insuring an electric car cheaper.
Although insurance providers may not cut their premiums due to such government incentives, the reduced costs of operation and accessible subsidies may aid in counterbalance the increased initial costs of insurance. Make sure to inquire about any discounts or schemes available for electric car insurance from the government.
7. Explore Discounts for Eco-Friendly Vehicles
Certain insurers also offer rebates or premium savings on environmentally friendly or electric vehicles. These rebates encourage the use of better, more environmentally friendly automobiles through cheaper premiums or benefits.
Inquire whether your insurance company offers any discounts, whether the vehicle is environmentally friendly, or if any stipulations come with such favourable rates. Since the market for electric car insurance is still evolving, some insurers might have limited-time offers or promotions for EV owners.
8. Understand the Impact of Repair Costs for EV Vehicles
Although electric vehicles have fewer parts than conventional gasoline cars, repairing an EV could be more costly due to the unique parts involved. EVs need certified technicians and authorised repair centres; obtaining components such as batteries, motors, controllers, and others is expensive.
This high repair cost also affects your insurance premium since insurers include the repair costs when determining the premium for EVs. Ensure your insurance has provisions for repair in authorised service centres, especially for electric vehicles.
9. Review Electric Car Insurance Policy Exclusions Carefully
As with any car insurance policy, reviewing the exclusions- the situations or events not covered by the policy is crucial. For electric car insurance, some common exclusions may include:
- Damage from Wear and Tear: This applies particularly to the battery, which can degrade over time.
- Improper Charging: Damage caused by non-approved charging equipment may not be covered.
- Intentional Damage: Any intentional harm to the vehicle, including modifications that void the warranty, will likely be excluded.
While buying electric car insurance, compare multiple insurers, ask about specific EV-related add-ons, and take advantage of discounts or government incentives. With the right electric car insurance, you can drive confidently, knowing you’re protected both on the road and at the charging station.
Pic Credit: freepik.com
