Page 26 - Insurance Times Octoberr 2022

electricity like your phone or laptop. Since electric cars are car insurance can be a great help and offer financial
not yet very common in India, getting an insurance policy protection in an unfortunate event like accidental damage,
for your electric car can be a little bit different. fire, natural calamities, or theft, and can ensure that you
drive your car without any worries. You must also keep in
The minimum requirement by law is to provide insurance in mind that having at least third-party car insurance is
respect of legal liability to pay damages arising out of injury mandatory in India to ply your vehicle on road.
caused to any person, unlimited in amount, and several
countries' laws also provide for damage to property of other As per the Motor Vehicles Act of 1988, all vehicles in India
people subject to certain limits and exception. Broadly, four must be insured with a motor insurance policy; electric cars
are three types of motor policies: are not exempted from this rule. It means that you have to
a) An `Act only' policy covers the minimum required by the compulsorily buy car insurance for your electric vehicle to
law. drive it on Indian roads. However, electric car insurance
policies aren't the same as regular car insurance plans. Since
b) The `third party only' policies which cover the insured's
electric cars are battery-powered and consist of a different
liability in respect of third-party injury, death or
engine, coverage offered by an electric car insurance policy
property damage.
is more customized. Also, the cost of car insurance for
c) A `third party fire and theft' policy would additionally
electric cars is higher as compared to the usual petrol and
cover damage to the car and its contents from fire or
diesel cars. So, premiums for electric car insurance policies
theft.
are higher than conventional car insurance plans. Below are
d) The `comprehensive' policy, which provides the widest the reasons behind the high costs associated with electric
and more common form of covers also, includes car insurance:
accidental damage to the vehicle in addition to the third 1. Electric cars are expensive to buy -
party, fire and theft cover. Electric cars are expensive to purchase compared to
regular cars, and even the cheapest electric cars in India
Such policies may also include personal accident benefits for cost more than Rs. 10 lakhs. Due to the high value of
insured and spouse, medical expenses and loss of or damage electric cars, their Insured Declared Value (IDV)
to rugs, clothing and personal effects. increases, resulting in increased car insurance
premiums.
There may similarly in ICEs' & EVs' availability in Motor
Although the up-front cost of buying an electric car is
Insurance - some add-on covers like, In-voice value
higher, it makes sense to invest in it as it will enable
protection, protection from inflation, Zero Depreciation
you to save on fuel costs and maintenance charges over
Cover, Engine Protection Cover, No Claim Bonus Protection
the years.
Cover, Roadside Assistance Cover, Daily Allowance Cover,
Passenger Cover, Consumables Cover, etc., in the self of your 2. Electric car parts are expensive -
insurer for you to avail on payment of extra premium. The primary reason for electric cars being expensive is
that their various components are costly. The most
Motor policies are described by the type of vehicle to expensive of them is the car's battery, which accounts
insured. Thus, there are separate policies for private cars, for more than 60% of its value. Replacing or repairing
motor cycles, commercial vehicles, taxis, lorries, vans, hire these parts can be a costly affair, which is one of the
cars and so on and the rules are exclusive to the type of reasons behind the high pricing of electric car
vehicle. So, all such considerations shall be specifically insurance. Car manufacturers are striving hard to
applicable in due course while arriving on the premium rates reduce the cost of these parts. If they can reduce the
for the specific one. costs of electric car parts, their insurance premium may
also decline.
You can't predict what might happen to your precious
electric cars. These kinds of cars have a lot of complex 3. Batteries have to be replaced -
technical and mechanical parts, that help it run smoothly, Electric cars draw their power from high-capacity
but can also give you trouble at any time. So, having electric batteries, and these batteries come with an expiry date,

26 The Insurance Times, October 2022