Battery Pack Add-on in EV Insurance

What is an EV Battery Addon Cover? 

Electric vehicle (EV) battery cover is an add-on offered by the insurance companies for their EV vehicle owners. This add-on is specifically designed for electric vehicles having battery packs and covers damages to both the motor as well as the battery pack. Although the coverage under this might sound similar to that of an engine protector add-on for ICT vehicles, there are other important things that are covered under this add-on which were not available in the regular engine protector add-on. This add-on is designed to meet the rising demand for EVs in India and is aimed at addressing the specialized needs of electric vehicle owners. However, this add-on has now been extended to Hybrid vehicles in addition to the electric vehicles. Hybrid vehicles are those that have a regular Internal Combustible Engine (IC) in addition to a battery pack. 

What is the need for EV Battery Add-on when there’s a Manufacturer Warranty in place?

Most of us might have doubted the necessity of taking an EV battery add-on when the car manufacturer would provide warranty up to a certain number of years on the battery back as well as the motor. So, we made an attempt to explain the differences between the warranty offered by the car manufacturer and the coverage available under the battery pack add-on cover. 

It is to be noted that Manufacturer warranty would only be applicable for manufacturing defects and if the battery pack is damaged due to any other means, then it would not be covered by the car manufacturer even under the warranty or extended warranty. Therefore, in order to safeguard yourself from high repair or replacement costs that could arise as a result of damage or loss to the battery pack due to natural and man-made issues, it is advisable to purchase an EV battery cover Insurance. 

When is the EV Battery Add-on applicable? 

1. Loss Due to Ingression: The first thing EV car owners fear is to drive the car in the rainy season or in any water clogged areas. It could happen that the water ingresses into the battery pack and damages it beyond repair. Even though drivers may not willingly drive the EV car into water clogged areas, it could sometimes happen that the water enters the car due to a flood kind of situation and damages the battery pack. Under this add-on, if there is any reported loss or damage to the battery pack due to water ingression, the insurance company would compensate the insured for their loss. 

2. Loss Due to Short Circuit: The other risk associated with battery packs is that there could be instances of short circuit occuring during vehicle charging, mounting or discounting that could further lead to damage to failure of the battery pack and other insured parts. In such cases, battery pack add-on covers the loss or damage suffered by the insured customer due to short circuit. In addition, the add-on cover also includes the damage to loss due to sudden power surge or fluctuations in the power that could potentially damage the battery pack and other insured parts. 

3. Accidental Means: The other situation where an EV battery add-on would be applicable is in case of loss or damage to the battery pack and other insured parts due to accidental means. It could happen that the battery pack might be damaged due to an accident resulting from collision with another vehicle or object. A battery pack insurance add-on covers the loss or damage to the insured parts due to any kind of accidental means. Other accidental means such as fire accident, blasting of battery due to over heat etc would be covered under the add-on subject to it not being covered under the warranty offered by the car manufacturer. 

4. Malicious Damage: Malicious damage from known or unknown parties could damage the battery pack of your EV car and all such instances would be covered under the battery pack add-on cover. In addition to the battery pack add-on cover, one could also consider taking rat bite or animal damage to cover the losses or damage to the internal or external parts of the battery pack and other insured parts. 

What Parts are Covered Under the EV Battery Add-on?

1. Loss or Damage to Electric Panel: This cover safeguards you in case of loss or damage to any of the electrical panels used for vehicle charging points resulting from any of the risks mentioned above. This also includes the loss or damage to the vehicle charging point and electrical panels due to animal attacks and scratches. For example, electric cars come with specific electric panels that are installed at a specific location, which is usually not inside the home but in the premises within the gate or compound wall. In such cases, the electric panel is exposed to natural calamities as well as animal attacks that could damage the electric panel. However, it is to be noted that the coverage under this add-on would only be limited to the electric panels installed specifically for the electric car or vehicle for which the add-on is purchased. For each electric panel, a separate add-on should be taken which comes included under the car insurance policy. 

2. Loss or Damage to the Charger: This section covers the loss or damage to the electric vehicle charger including the charging cable due to any insured peril mentioned above. This section covers any loss or damage to both the wall mounted chargers as well as portable vehicle chargers. Chargers could get damaged due to short circuit, animal attack and any other external natural causes or internal causes that are mentioned in the proposal document. 

3. Additional Services: This section provides additional services such as roadside assistance which is particularly useful when the vehicle becomes immobilized within the geographical limit mentioned under the policy. It could happen that the electric car malfunctions due to a battery issue such as a dead battery or battery running out of power. These services are provided as per the terms and conditions mentioned under the base policy. It includes a mobile charging station where the insurance company would send a mobile generator van or portable mobile generators to charge the battery so that you could take the EV to your home or any nearest charging point. In case of vehicles that permit swapping of batteries, this section provides a completely charged replaceable battery to swap with your dead battery. 

Exclusions in Battery Pack Add-on Cover:

• This add-on would not be applicable in case of claims that come under the manufacturing warranty or recall of the vehicle due to some manufacturing fault. 
• Any claims where the repair has been carried out by the insured without prior approval from the insurance company. 
• Loss or damage to the battery pack due to storage, wear and tear. 
• Claims arising due to usage of the battery pack in conditions contradictory to those mentioned by the manufacturer. 
• Negligence in periodic maintenance resulting in damage to the battery pack is not covered. 
• Wilful damage by the family members or insured. 
• Any damage that results from modifications or additional installations to the vehicle that were not approved by the car manufacturer (OEM). 
• Consequential loss or damage. 
• Any repair or replacement done at an unauthorized garage or service station. 
• In case of total loss or constructive total loss of the vehicle. 
• If the battery is not charged and maintained as per the process stipulated by the OEM. 

Factors to Consider Before Purchasing a Battery Pack Add-On Cover:

1. Age of the Car: The first thing to consider before taking the battery pack add-on cover is the age of the EV. If the EV is below 5 years, then it is highly advisable to take the battery add-on cover. However, we suggest to avail this add-on as long as it is offered by the insurance companies, irrespective of the age of the vehicle. Most of the insurance companies offer this add-on only for a specific number of years such as 3-4 years from the date of registration or manufacturing of the electric vehicle. 

2. Sum Insured: The other thing to consider is the sum insured under this add-on. In general, the cost of replacement of the battery would be around 40-50% of the total value of the vehicle and this should be kept in mind before taking the add-on. This is due to the fact that certain insurance companies only offer the sum insured up to 30% of the total value of the car, in which case you would be at a disadvantage. Therefore, we advise you to check the sum insured available under the add-on before finalizing the insurance company. We also suggest you to take the highest possible sum insured under this add-on keeping in mind the inflation that could lead to increased prices of the battery pack in the future. 

3. Areas of Operation: The area in which you drive your electric car should be considered before taking this add-on. If you drive in flood prone areas or low lying areas where water could easily flood the area resulting in water ingression into the battery, then you should definitely consider purchasing this add-on as long as it is offered by the insurance companies. For example, if you install your charger in your home and there are chances for animal attacks on the charger, then it is important to take the add-on to cover your losses from such animal attacks in the future. 

4. Co-Payment & Deductibles: Co-payment and deductibles refers to the amount that has to be borne by the insured customer at the time of claim settlement. It could happen that these add-ons come with a certain copayment and deductibles which is usually given as a percentage of the overall claim amount. We advise you to select an EV battery policy that does not contain any copayment and comes with standard deductibles. 

5. Exclusions: The other important thing to check before taking an EV battery pack add-on is the exclusions mentioned under the policy. There are standard exclusions as well as insurer specific exclusions in a policy. All these exclusions should be considered before taking the add-on as some exclusions could limit the scope of coverage under the policy. 

Battery Pack Add-on Cover claim process:

Step 1: The first step in the claim process is to intimate the insurance company regarding the damage and raise a claim request. Insurance companies would then provide you with a claim reference number that has to be quoted in all future interactions with the company. In case of a reimbursement claim, all you need to do is to take the vehicle to a nearby cashless garage and they would take care of the claim registration process. All you would need to do is to coordinate with the garage by providing required details from your end such as the documents required for the claim settlement process. In case of reimbursement claim, you can get the repairs done and apply for reimbursement from the insurance company. 

Step 2: The second step in the electric car claim settlement process is to provide the required documents to the insurance company for processing the claim. Once the required documents are shared with the company, a surveyor would be appointed to carry out the survey of the damaged parts and provide you with an estimate of repairs. Once you approve this, the garage would proceed with the repair process. 

Step 3: After the repairs are done, the garage would inform you to take the vehicle by paying any extra amount such as Copayment or deductible. The rest would be paid by the insurance company directly to the garage. Once this process is done, the claim would be closed by the insurance company.

Documents required for Battery Pack Add-on Cover claim: 

• Duly filled and signed claim settlement form. 
• Original RC copy, Drivers license and Insurance certificate. 
• FIR copy in case of theft and Third party claim
• Estimated repair bill
• Original repair bills and payment receipts. 

FAQs: 

1. What Is an EV Battery Add-On Cover? 

An electric vehicle battery add-on cover is a rider designed to cover the damages or losses arising out of an insured event covered under the add-on. 

2. How Many Claims Can Be Made Under This Add-On? 

The maximum number of claims that can be made under this add-on during the policy are usually limited. For example, IFFCO Tokio would provide only one claim under this add-on for the entire life of the EV. 

3. What Is the Cancellation Process for This Add-On?

The cancellation process for EV battery pack add-on is similar to that of the other add-ons offered under the policy. The add-on would only be valid as long as the base policy is active. 

4. Can I Purchase the Battery Pack Add-On Mid-Term?

No. An EV battery pack add-on could only be purchased at the time of renewal of the policy. No mid-term addition of add-on would be permitted under the policy. 

5. What Should I Keep in Mind After Taking This Add-On? 

The first thing to keep in mind after taking this add-on is that one should always take care of their EV battery pack and follow all the procedures stipulated by the Original Equipment Manufacturer (OEM) before using the battery pack.