Page 43 - The Insurance Times January 2022

CONSIDER THESE

FACTORS BEFORE

PURCHASING EV

INSURANCE POLICY

M any automobile companies are gearing up to cost, cause minimal pollution to the environment, and most

importantly, save on petrol and diesel."
launch electric vehicles (EVs), and some are
out with their e-vehicles already. Industry
However, with the higher price of the vehicle, it becomes
experts believe that with increasing consumer
crucial to keep it insured to stay financially protected in case
awareness and strict emission norms, the demand for these
of an unfortunate event.
e-vehicles may continue to increase in the coming years.
To help you make the best decision for buying an EV insurance
Experts believe that internal combustion engine vehicles are
policy, here are some factors that you must consider.
vital contributors to environmental pollution, leading to the
growing need and demand for EVs. Coverage: The most important thing to consider when buying
EV insurance is to check the coverage features offered under
“Electric vehicles have come as a clean energy initiative, as
it. As the parts of an electric vehicle are comparatively
they offer low or zero emissions and have become a vital part
expensive, you must purchase adequate insurance cover for
of OEM (original equipment manufacturer) business
them. If you buy a comprehensive insurance policy, it will
strategies. Along with the growth in the EV segment in the
typically protect you against third-party liabilities and other
country, there will be a huge demand for motor insurance for own damages (OD) cover. OD coverage can help you avoid
electric vehicles," said Indraneel Chatterjee, co-founder,
expensive repair bills in case of accidents, natural calamities,
RenewBuy, an online insurance aggregator.
riots, fire, as well as losses due to theft, etc.
In March 2020, the Insurance Regulatory and Development
Also, with a personal accident cover, you can be financially
Authority of India (Irdai) announced that insurers would offer
secured in case of any misfortune. It includes bodily injuries,
a 15% discount on third-party motor premiums for electric partial or total disabilities due to accidents and uncertainties
vehicles to incentivize their use.
such as accidental death.
“The government of India is also charging GST at 5% for
Insured declared value: IDV is the amount that you will be
electric cars, which is way lower than the internal
eligible to receive from the insurance company in case of a
combustion-powered vehicles. The impetus for the
total loss of the electric vehicle. A lower IDV means a lower
manufacture of electric vehicles has begun, and the
premium and vice versa. It is an essential factor to consider
government is moving towards a promising future," said when buying EV insurance so that you are not offered a lesser
Chatterjee.
amount in case a claim for total loss arises in the future. Also,
Authorities have also provided ?1.5 lakh tax benefit since an electric vehicle costs a lot, this factor becomes more
underSection 80 EEB for interest paid under EV car loan. significant to consider.

Ankit Agrawal, chief executive officer and co-founder, Premium: The other most important thing to consider when
InsuranceDekho.com, said, “These e-vehicles may be slightly buying EV insurance is premium. This is the amount that you
expensive compared to other motor vehicles, but they have will be required to pay to the insurance company in order to
their own set of advantages. These include low operational avail of coverage benefits under an insurance policy offered

The Insurance Times, January 2022 43