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Sep 10, 2022

Everything that You Should Know About Insuring an Electric Car

The last couple of years has witnessed a buzz around electric technology in automobiles. While it may be for reasons like soaring fuel prices and to tackle critical issues like climate change, it has paved a new way for the future of the auto industry. A report by the NITI Aayog states that by 2030, India’s mobility-related demand for energy can be saved by 64% and carbon emissions by 37%, by adopting a policy of shared, electric, and connected mobility future. The combustion engine was a breakthrough century ago, and so is the electric vehicle technology which is becoming popular among cars. Many car buyers are now considering buying an electric car as their next upgrade. The government is also focused on creating new infrastructure, required for the charging and battery technology of these electric cars. A report by Tomorrow Makers states that the electric motor vehicle market is expected to grow at a CAGR of 26.8% by the end of 2030. In addition, the government also offers subsidies to incentivize the purchase of electric cars under the FAME (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles in India) scheme. While electric vehicles have several benefits, it has certain compliance in form of registration and insurance. Here’s all you need to know about getting insurance coverage for your electric car.

Is Car Insurance Mandatory for Electric Cars?

The Motor Vehicles Act of 1988, requires all vehicles registered in the country to mandatorily have an insurance certificate. This is irrespective of whether it is a conventional fuel-operated car or an electric car. Thus, seeking car insurance is a requirement that cannot be skipped. A car insurance policy helps avail financial coverage for legal liabilities in addition to getting compensation for repairs. *

What Should You Know About Electric Car Insurance?

Till a few years back, there was no separate car insurance policy that covered electric vehicles. However, as more and more electric vehicles are being launched, insurance companies are coming up with exclusive electric car insurance plans designed for electric vehicles. The regulator, the Insurance Regulatory and Development Authority of India (IRDAI), also prescribed separate premium rates for third-party plans based on battery capacity. Moreover, in the latest draft notification mentioning the third-party premium rates for the financial year 2022-23, the regulator has proposed a concession on car insurance prices of 15% for electric cars and 7.5% for hybrid electric cars. You can visit the official website of IRDAI for further details. *

What are the Types of Insurance Policies Available for Electric Cars?

Similar to conventional fuel-operated cars, two types of insurance plans are available—third-party plans and comprehensive plans. Third-party plans provide coverage for liabilities that may arise in the event of an accident. It can be due to an injury to a third person or damages to their property. * *Standard T&C Apply  On the contrary, comprehensive plans provide coverage for even repairs to your car. Thus, the cost of repairs, like natural calamities or theft, along with third-party liabilities, are insured in a comprehensive plan. Since a comprehensive plan provides broader coverage, the electric car insurance cost for them is also higher.

Why Do You Need to Buy Insurance for EV Cars?

Having insurance for EV cars has the following benefits:

Legal Compliance

As discussed above, it is mandatory to have insurance coverage for electric vehicles due to regulatory compliance with the Motor Vehicles Act.

Financial Coverage for Repairs

Since the battery technology and other components are relatively new, its repair costs may also be a tad bit higher. With an insurance cover, you can make sure these expensive repairs are taken care of by the insurance company. When selecting a suitable insurance plan, make sure to use a car insurance calculator that not only aids in the comparison of several plans but also determines the covers that you can choose with your coverage. *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.  

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