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Electric vehicles are gaining traction in India over the last few years, and having a proper electric vehicle insurance plan in place has become of utmost importance. Electric vehicle car insurance is a motor insurance policy application that covers the losses or damages caused to the EV car due to any insured perils. There is no separate car insurance policy for electric vehicles. Instead, the existing motor insurance plan is extended to electric cars by including certain additional features. It is important to have an electric car insurance policy for your electric vehicle as third-party insurance is mandated even for electric vehicles, and the cost of repair of electric vehicles is no less than that of Internal combustion vehicles (ICV). For this reason, electric car insurance plans are being introduced by various insurance companies such as Bajaj Allianz, Acko, Digit, etc., which is nothing but a modification of the existing car insurance policy.
Electric vehicle car insurance is an agreement between the insured and the insurance company in which the insurance company would agree to compensate the losses suffered by the insured vehicle in return for a nominal amount known as a premium. Electric car insurance premium is calculated similarly to combustible fuel cars, with the only difference being the extra discount offered to electric cars. Electric cars have a battery pack that acts as the engine, and the energy is derived from this battery pack. All other components, such as tires, brakes, etc., are common.
Own Damage Cover: Own damage cover in electric cars includes the damages caused to the insured vehicle due to an insured peril mentioned below. The insurance company's maximum liability in case of a damage claim would be the insured declared value mentioned in the electric car insurance policy document. The damage section covers all the kinds of damages to the electric car that could arise from the perils such as accidents, fire, allied perils, natural disasters, acts of god perils, theft or robbery, and other man-made perils such as riots, strikes, and malicious damage.
Accidents are the most common perils that could happen on roads, and an electric car insurance policy covers the losses or damages caused to the insured electric car due to an accident during the policy period. This section covers the damage to electric cars, whether it is your fault or not. In simple words, the coverage would be applicable if the electric car is damaged due to your fault or if you are not at fault. Accident cover includes the damage to the vehicle due to an accident during the policy period. An accident is a spontaneous, unplanned, and unpredictable incident that could result in loss or damage to the electric car. Head-on collision of vehicles is also covered in this section.
Man-made perils such as strikes, riots, and malicious damage are covered under the damage section of the electric car insurance policy. Theft is also covered under this section, one of the important perils that could result in total loss if the vehicle is irrecoverable. The damage section is necessary as it covers theft, the most important peril that could happen at any time. Even old electric cars are not exempted from theft, stressing the need to have this covered in an electric car insurance policy. Theft of a vehicle can be claimed under the own damage section of the policy. If the vehicle is not recoverable, then the entire insured declared value will be paid to the insured customer. There are only 2 cases in which the entire insured declared value would be paid to the insured; one is constructive total loss in which the cost of repair of the electric car would exceed 75-80% of the insured declared value; the other is in case of total loss which is the case with theft of the electric car where it is not recovered even after adequate efforts by the police.
Electric cars are also prone to fire accidents, similar to IC vehicles, stressing the importance of insurance protection against fire. Electric vehicles are in the news because of fire accidents for various reasons, such as overheating, battery explosion, etc., which manufacturers address to a greater extent. Despite this, the risk of fire is nonetheless evitable while using an electric car, and the source of this risk could be either internal or external. Fire is another peril that could result in the total or partial loss of an electric vehicle, in which case the insured declared value would be paid as the maximum claim amount to the insured.
Electric vehicles could be damaged due to natural disasters such as Cyclones, Earthquakes, Hurricanes, Floods, and many more. These natural disasters are also known as acts of god in certain situations, and such perils are covered under an electric car insurance policy. Natural disasters are the main reason for engine failures in most combustible cars, and the situation could be no different in electric cars as electric cars are also susceptible to water damage. Water entering the battery of electric cars could damage the battery beyond repair, thereby treating it as a total loss. This could happen in situations such as floods and inundations where the water gets clogged in a place, and the clogged water enters the vehicle's engine.
Electric car insurance also includes the personal accident section, which covers the death or disability of the insured or paid driver during the policy period. As per the Insurance regulatory and development authority rule, it is mandatory to have Rs.15 Lakhs personal accident cover, and the scope of the cover is limited to the accidents occurring while driving the insured vehicle. This section would cover the death and disability of the insured customer during the policy period while driving the electric car or riding as a passenger. Personal accident cover is mandatory for the driver/ owner, and this could be extended to the paid driver and passengers as well on payment of an extra premium.
Zero depreciation cover
Electric cars are no exception regarding wear and tear. Wear and tear results from the car's usage, which is calculated at the time of claim. A basic principle in insurance states that the insured cannot make profits from the insurance policy. This principle is known as the "Principle of Indemnity," which states that the insured would be put in the same condition similar to that which existed just before the occurrence of the loss. So before the occurrence of loss, the vehicle had undergone wear and tear. Suppose the insurance company should replace it with a new part. In that case, it violates the principle of indemnity as the insured is put in a condition better than that existed before the occurrence of the loss. So, a basic electric car insurance policy does not have protection against the wear and tear of parts at the time of claim settlement. To overcome this issue, insurance companies have launched zero or nil depreciation cover, which does not factor in the depreciation at the time of claim settlement. This means the wear and tear of a part would not be considered while settling the claim. Zero depreciation cover ensures that you get the entire claim amount without deductions for depreciation.
Motor protector cover
The electric car survives only on the motor, which includes battery and other components. The motor is the heart of an electric vehicle, and any damage could set you back by at least a couple of lakhs. The motor protector cover in electric car insurance is similar to the engine protection cover for internal combustion vehicles. The motor protector covers the loss or damages to the motor and battery pack occurring on a stand-alone basis, i.e., without damage to the vehicle simultaneously. There could be stand-alone damages to the motor during floods and other natural calamities such as inundation and cyclones. In such cases, the basic motor insurance policy doesn't cover the losses as the loss has not occurred in conjunction with the vehicle. It is important to understand that this section does not cover the general wear and tear of the motor and its parts but is only concerned with the losses incurred by the motor due to any of the insured perils.
Consumables cover
Consumables are those parts in a vehicle that cannot be repaired and reused. Consumables include air filters, engine oil, disc oil, nuts, and bolts, which will be replaced once damaged. These consumables cannot be repaired, so there is no concept of deprecation. Therefore, the only way is to replace these parts after an accident. In doing so, the insured might end up with a new part that was not there just before the occurrence of damage, and this violates the principle of indemnity, which states that the insured would be placed in the same condition just before the occurrence of loss and consumer should not benefit out of an insurance policy. Therefore, consumables cover would come in handy in an electric car insurance policy with components similar to that of an internal combustion engine vehicle.
24*7 Roadside assistance
Electric cars are also prone to breakdowns and require assistance if such breakdown happens in the middle of nowhere. 24*7 roadside assistance in an electric car policy assists the insured in case of events such as breakdowns. This section assists with sending a mechanic to the breakdown place, towing assistance to a nearby garage, a one-way trip to a nearby hotel in a taxi, emergency hotel accommodation, etc. Roadside assistance add-on also includes providing mechanical or electrical assistance on the phone, fuel, jump start of battery, etc. In the case of electric vehicles, the following features are offered as a part of roadside assistance service.
Personal baggage cover
Electric car insurance policy has a personal baggage cover as an add-on, compensating the insured in case of loss or damage to their baggage. Personal baggage doesn't include valuables such as laptops, gold, electrical gadgets, etc. Personal baggage limits the coverage to the insured's bags, clothes, books, and other similar stuff. The loss or damage to the baggage should have happened while traveling in the insured vehicle or when the vehicle was parked. Unattended baggage in a parked vehicle would not be eligible for compensation as this comes under the insured's negligence. Personal baggage cover requires the insured to provide the bills for the items in the baggage to be eligible for compensation.
Key replacement cover
Most electric vehicles do not have a key that could be used to start the vehicle as they work with a start/stop button. The ignition of an electric vehicle depends on the proximity of the key to the vehicle, and due to this, the key becomes very valuable to the insured. Moreover, the keys nowadays have advanced mechanisms, making them costly and difficult to replicate. Key replacement add-on covers the cost of replacement of key and lock due to various perils such as attempted robbery, natural calamities, etc. A high-end car key could cost a couple of lakhs, and replacing this key could become costly for the insured. It is important to note that the insured should file a First Information Report (FIR) with the police immediately after losing the key, as it could be used to steal the insured vehicle. Without an FIR for stolen or lost keys, the insurance company could decline the theft claim reported subsequently.
Daily conveyance benefit
Unlike their counterparts, electric cars may experience breakdowns for unknown reasons and require repairs. Such repairs could take one day or may extend beyond one day, and in such cases, the insured needs to be compensated appropriately for their inconvenience. The daily conveyance benefit in electric car insurance compensates the insured with a daily conveyance benefit to travel from one location to another. In most cases, the competition would be to travel from home to the office and back home when the electric car is in the garage. Daily conveyance benefit would have a deductible of one or two days, after which the conveyance would be paid to the insured.
There are various benefits of taking an electric car insurance policy, which are mentioned below:-
The sum insured is the most important thing in any electric car insurance. The sum insured is the maximum coverage available for the electric car and the insurance company's maximum liability. In case of a claim, the maximum compensation that would be paid is the insured declared value of the electric car, which is nothing but the sum insured. So, selecting the maximum sum insured for your electric car policy is very important. The sum insured varies from one model to another and also depends on the vehicle's age. The sum insured would decrease every year due to the vehicle's depreciation.
A lower sum insured might attract lower premiums, but at the time of claim, it would negatively impact the insured as the claim amount would be less. The sum insured for a brand-new vehicle would be 95% of the invoice value and thereafter reduced by 10% yearly. So, it is important to make sure that the sum insured is always appropriate for the age of the electric car.
The other important thing to consider while taking an electric car insurance policy is the add-ons. Add-ons, also known as riders, are the additional coverage available to the insured on payment of an additional premium. Add-ons include zero depreciation, consumables cover, motor protector cover, roadside assistance cover, etc. Taking too many add-ons would increase the premium drastically, whereas taking too few add-ons would affect the coverage. It is important to strike a balance between the number of add-ons and the premium payable.
The other thing to consider is the number of network garages available in your area of operations. The higher the number of network garages, the higher the comfort in case of a claim. For example, if you are residing in a Tier 2 city and there are no network garages in your area, then there is no point in taking the insurance policy from that insurance company. Most insurance companies would tie up with the garages in Tier 1 areas, but the availability should be checked in your area of operations. The list of network garages for electric car insurance policies can be checked here. It is important to note that the list is dynamic and keeps updating from time to time. Hence, it is advisable to call the insurance company's customer care and confirm the availability of network garages before proceeding with claim settlement.
Electric cars aren't like petrol diesel vehicles where you can fill in a few minutes and then embark on your journey. Electric car charging takes time, so it is very important to get on-spot charging assistance if you are stuck somewhere from a charging point. Unlike petrol or diesel, it is impossible to carry the charging in a power bank and then fill the electric car battery, similar to how we carry petrol in a bottle and fill in the tank before reaching a petrol bunk. For this reason, electric car insurance companies should offer on-spot charging assistance so that if your car gets stuck in the middle of nowhere, you can use this facility instead of towing the car to a nearby garage or charging point.
The on-spot charging feature provided by insurance companies is available only in select Indian cities, and the feature would come in a vehicle that produces electricity for the electric car to get charged.
Make & Model
The make and model of the electric car determines the premium to be paid by the insured customer. This is due to the loss ratio experienced by that particular make and model. Currently, there are a very limited number of electric car models in India, and the premium is decided keeping in mind the make and model of the electric car. Some make and models might have high premiums, whereas others have low premiums. For instance, TATA electric cars running as commercial vehicles might attract higher premiums when compared to those in the passenger segment. Passenger cars have a lower claim ratio when compared with commercial cars such as taxis.
IDV
The other important thing considered for premium calculation in electric cars is the insured declared value (IDV). IDV is the sum insured for the electric car and is also the insurer's maximum liability. The higher the IDV, the higher would be the premium. An increase in IDV increases the insurance company's liability, and therefore, higher premiums are charged. It is also useful to understand that the IDV values change with changes in the make and model of the electric car. The invoice value determines the IDV value. IDV would have a lower limit and higher limit for every model of electric car.
Add-ons opted
The number of add-ons opted would also decide the electric car insurance premium. The higher the add-ons, the higher would be the premium payable. The add-on premium is calculated as a percentage of the IDV. So, higher IDV leads to higher add-on premiums. Therefore, it is necessary to opt for add-ons judiciously depending on the need instead of taking every add-on. The insured should decide the need for a particular add-on and then opt for it. For support on selecting add-ons for your electric car, please click here. The add-on premium would be calculated separately and added to the damaged section.
Accessories
The other thing that decides the premium in electric car insurance is the accessories that are fitted to the car, which are not from the original equipment manufacturer. Suppose you have fitted any extra accessories, such as a music system, holders, etc., which are not provided with the car and are not from the OEM. In that case, these accessories are to be insured to cover the insurance. These accessories would attract a premium, depending on the accessories' type and value. These accessories would come under their damage section, as any damage to these would be covered under their damage section. It is important to report any accessories taken that are not part of the original car to the insurance company and make necessary endorsements accordingly to avoid rejection of claims in the future.
Geographical Zone
The geographical Zone in which the electric cars ply also decides the insurance premium. India is the allowed geographical Zone in which electric cars could ply. If one needs to travel to neighboring countries such as Bhutan, Nepal, Bangladesh, Sri Lanka, etc., One needs to pay an extra premium to the insurance company. The increase in geographical zones increases the risk of the insured, and also, the third-party claim settlement procedure could be different in those countries, leading to increased premiums.
No claim bonus
No claim bonus is given to the insured for having/ reporting no claim in the previous year. No claim bonus is calculated as a percentage of the overall damage premium. For example, if the own damage premium is Rs.10k and the no-claim bonus is 50%, then the net own damage premium comes to Rs.5k. The Higher the no-claim bonus, the higher the discount in premium. No claim bonus plays an important role in calculating the premium in an electric car insurance policy. So, mentioning your claim history properly when taking the electric car insurance policy is important. Wrong declaration of no claim bonus to avail discount can create problems in the future as the insurance companies would get the previous year's claim information from your previous insurer and then will send no claim bonus recovery notice, which is nothing but the premium recovery that was claimed as no claim bonus. If the recovery notice is not answered and the endorsement is not passed, then the insurer might not settle the claim.
Voluntary Excess
Excess or deductible is the amount that would be deducted at the time of claim settlement. There are two types of deductibles in an electric car insurance policy: compulsory deductible, applicable for each and every claim during the policy period, and voluntary deductible, which is over and above the compulsory deductible. A voluntary deductible amount can be selected by the insured at the time of taking the policy. In case of a claim, the insured must bear that particular amount before the insurance company settles the remaining amount. The higher the voluntary excess, the higher the discount on damage premiums. It is important to note that having a higher voluntary excess means that your liability is increasing proportionally.
Cubic Capacity |
One year TP premium |
Kilowatt |
One year TP premium |
|---|---|---|---|
| Not exceeding 1000cc |
Rs.2094 | Not exceeding 30KW | Rs.1780 |
| Exceeding 1000cc but not exceeding 1500cc | Rs.3416 | Exceeding 30 KW but not exceeding 65 KW | Rs.2904 |
| Exceeding 1500cc | Rs.7897 | Exceeding 65 KW | Rs.6712 |
Step 1: The first step in the electric car EV claim settlement process is to contact the insurance company immediately after the accident. You should register the claim online by dialing the toll-free claim number mentioned on the insurance company's website or by writing an email. A brief description of the accident should be given to the insurance company, such as the cause of the accident, time and place of the accident, parties involved in an accident, and any third party bodily injury or property damage; Thena claim reference number would be generated by the insurance company which should be noted down and saved for future reference.
Step 2: In the next step, insurance companies might ask you to take the electric car to the nearby network garage for repairs if there would be no consequential loss or, in some cases, arrange a towing facility to the nearby garage. If it is a network garage, the garage staff would fill out the claim request form with all the details and share it with the insurance company for further processing. Then, the insurance company would appoint a surveyor to assess the loss or damage caused to the electric car EV within 24 hours of registering the claim.
Step 3: The surveyor would then survey the electric vehicle, assess the quantum of damages caused to the electric vehicle, and submit the report to the insurance company. Insurance companies would then request the approval of the insured to proceed with the repairs, and once the insured consented, the garage would carry out the repair. In case of cashless claim settlement, the insured need not pay the claim amount as the amount would be paid directly by the insurance company. But in case of reimbursement claim settlement, the insured should pay the claim amount first and then claim the same from the insurance company by submitting the original claim-related documents. The claim would be settled, and the insured can take the electric vehicle once the insurer pays the claim amount, and any deductible is to be paid by the insured.
Documents Required for Electric Vehicle EV Claim Settlement :
