Why Is Car Insurance Expensive For Electric Vehicles

Why Is Car Insurance Expensive For Electric Vehicles

Electric vehicles have been emerging as a popular means of commutation around the globe. From public transport to personal vehicles, more and more people are opting for e-vehicles for their eco-friendly functionality, practicality, and affordability.

These vehicles ask for lower maintenance, do not emit pollutants and save money on fuel, among other benefits. These minimise carbon footprint. However, as per the latest market buzz, it has been observed that insurance for such vehicles is higher than that of petrol or diesel-powered vehicles.

What makes insurance for electric cars dearer?

The relatively high insurance cost of e-vehicles leads to the high premium costs. It’s essential first to understand what spikes the high premiums for electric vehicles.

Cost of electric cars

While it is expected that with the popularity of e-vehicles, the cost of cars will also go down, things look a tad different currently. Electric vehicles are engineered with sophisticated parts that, such as high-battery capacities, increase the cost of the car itself. The higher the insured declared value, the higher will be the premium.

The lithium-ion battery installed in e-vehicles accounts for more than 50% of the car’s cost. It also indicates that any problem in the battery will subsequently cost a higher replacement or repair cost, thus, pushing the insurance premiums higher. With rigorous efforts by top-notch car manufacturing companies to reduce the battery costs of e-vehicles, e-vehicles will likely become relatively cheaper, proportionately impacting the insurance premium.

Maintenance of e-vehicle battery

E-car batteries, like other batteries, have a shelf life and need to be replaced over a period. With the high prices of lithium-ion batteries, replacement costs are higher, causing insurance premiums to shoot up. It impacts the overall maintenance cost of the car. The price will also decrease with a decreased need for battery replacement, resulting in policyholders paying a lower premium.

Complex parts

A relatively new technology, electric vehicles require higher maintenance because of their complex car parts. It also calls for skilled people to service or repair the cars. As the demand for e-vehicles gradually increases, the marketplace might soon see a larger population of competent mechanics. However, as of now, the talent pool skilled to handle conventional cars are more, escalating the repair and replacement cost. You can run car insurance online check to find out more details about insuring your electric four-wheelers.

E-vehicle insurance scene in India

In India, the car insurance third party online policy premium is fixed by the IRDAI (Insurance Regulatory and Development Authority of India). With the rising pollution and the need to control it, IRDAI has introduced third-party motor insurance for e-vehicles at a discounted rate of 15% compared to that of the standard petrol and diesel vehicles. This move is to promote the use of eco-friendly electric cars.

For vehicles with a battery capacity of less than 30kW, the premium has been fixed at Rs. 1,761 for a year and Rs. 4,493 for 3 years. For battery capacity between 30kW and 65kW, it is Rs 2738 (for 1 year) and Rs 8104 (for 3 years). For more than 65kW, the premium is Rs. 6,707 and Rs. 20,659 for 1 year and 3 years, respectively.

You can check out car insurance third-party online policy makers' site for a comprehensive policy and get an instant quotation.

How to find a low-cost insurance policy for electric cars?

With these handy tips, you can find an affordable electric car insurance policy for your e-vehicle.

Check for a comprehensive policy

Most insurance providers make all information, policy renewals, etc., accessible online. With such digital services, you can conveniently compare policies, access add-ons and compare services of different insurers in the market.

Comparing policies and benefits can help you find providers that offer a range of services at a lower premium. Some providers facilitate instant insurance against the appropriate policy and personal details shared on the provider’s website or a valid mobile app. Online buying also reduces the hassle of visiting the insurance office or paying commissions to a third party.

No Claim Bonus

You can receive a discount on the premium if you haven’t raised a claim during your current policy period. Some providers offer a discount of up to 50%, especially if you haven’t claimed for 5 consecutive years. Such accumulated bonuses can help in reducing the car insurance premium for e-vehicles.

Deductible limits

If your claim liability decreases, you can avail of a discount on your insurance premium. It can be done by selecting a voluntary deductible limit, a fixed amount that the policyholder can choose to pay during their claims. Opt for a voluntary deductible if you see a low chance of raising an insurance claim for your electric vehicle.

Look out for discounts

Some top-rated insurance companies provide special discounts on several occasions to help reduce the insurance premium. Keeping track of such deals can reduce the cost of insuring your e-vehicle.

In conclusion

To find the right insurer for your e-vehicle, you can review the services provided by some of the top best insurance companies and find a suitable one to get your e-car covered.

Read More:- Best Third-party Car Insurance with High Claim Settlement Ratio