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Electric Car Insurance
Apr 20, 2024

The Surprising Reasons Why Electric Car Insurance Can Be More Expensive

As electric vehicles (EVs) gain popularity for their environmental benefits and innovative technology, one aspect that often surprises new and prospective owners is the cost of electric car insurance. Despite the assumption that electric cars might be cheaper to insure due to their safety features and reduced environmental impact, the reality may be somewhat different. This article delves into the nuances of electric vehicle insurance costs, uncovering the reasons behind higher premiums and offering insights into navigating these expenses effectively.

Is Insurance More Expensive for Electric Cars?

Yes, insurance for electric vehicles can be more expensive than for their petrol or diesel counterparts. This discrepancy arises from several factors, including the higher purchase price of EVs, the cost of parts, and the specialised maintenance they require. However, as the technology evolves and becomes more mainstream, there may be potential for these insurance costs to decrease.

Reasons for High Premium Cost

Understanding the reasons behind the high cost of motor insurance for electric cars is crucial for owners and potential buyers. Here are the main factors contributing to the increased premiums:

Electric Cars Are More Expensive

EVs generally have a higher market price compared to traditional vehicles, primarily due to their advanced technology and the cost of batteries. This increases the Insured Declared Value (IDV), which is a direct factor in calculating insurance premiums.

Electric Car Parts Are Expensive

The lithium-ion batteries, which are essential for EV operation, represent a significant portion of the vehicle's cost. Repairing or replacing these batteries, along with other specialised parts, can be expensive, influencing the insurance premium.

Electric Car Battery Replacements Are Common

EV batteries have a limited lifespan and may require replacement over the vehicle's life. The high cost of batteries contributes to the overall insurance premium, reflecting the potential expense of claims.

Fewer Electric Vehicle Mechanics

The advanced technology of EVs requires specialised mechanics for repairs and maintenance. The scarcity of qualified professionals can increase labour costs, contributing to higher insurance rates.

Insurance Cost for Electric Vehicles in India

The IRDAI is the regulatory party for all sorts of insurance, including all types of electric car insurance policies in India. While the cost may be higher compared to insurance for traditional vehicles, rest assured that is regulated and is decided after considering several factors.#

What Information Should an EV Owner Share with the Insurer?

When insuring an electric car, owners need to provide details such as the vehicle model, location, year of manufacture, and usage. This information helps insurers accurately assess the risk and determine the appropriate premium.

Ways to Find a Low-Cost Insurance Policy for Electric Cars

  1. Buy Online: Comparing policies and prices online can help you find the most affordable electric car insurance.
  2. Use Accumulated No Claim Bonus (NCB): Leverage your NCB for discounts on premiums.
  3. Opt for Voluntary Deductible: Agreeing to a higher deductible can lower your premium cost.
  4. Install an Anti-theft Device: Some insurers offer discounts for vehicles equipped with anti-theft systems.
  5. Look for Discounts: Always be on the lookout for promotional discounts or offers from insurance providers.

Using Online Premium Calculator For Car Insurance*

A car insurance calculator is an invaluable tool for potential EV owners. It can help estimate the insurance premium based on the vehicle's details and coverage options. This digital tool allows users to adjust variables and instantly see how changes affect the premium, aiding in financial planning and decision-making. While the cost of insuring an electric vehicle may be higher now, the evolving landscape of the automotive and insurance industries holds promise for lower premiums in the future. As technology advances, repair costs decrease, and the market for electric vehicles expands, insurers are likely to adjust their rates accordingly. In the meantime, EV owners can employ strategies such as comparing policies, maximising discounts, and choosing coverage wisely to manage insurance expenses.


Do I need to insure an electric car?

Yes, insuring an electric car with at least a third-party liability policy is mandatory, just like any other vehicle, to cover potential damages or liabilities.

Does high battery cost increase insurance premiums for electric vehicles?

Yes, the high cost of EV batteries is a significant factor contributing to the increased insurance premiums for electric cars.

How to find the right insurer for my electric car?

Research and compare different insurers, focusing on their coverage options, premiums, customer service, and experience with electric vehicles.

Which is a suitable insurance plan for electric cars?

The suitable insurance plan depends on your specific needs, including coverage options, budget, and the level of protection you desire for your electric vehicle. You can browse for EV insurance plans online through insurer websites and apps. Alternatively, you may also check plans through your insurance agent.   *Standard T&C Apply #Visit the official website of IRDAI for further details. ##All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions. 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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