Electric Vehicle Insurance: Why is it More Expensive?

Posted on: Jun 21, 2022 | | Written by:

Electric Vehicle Insurance: Why is it More Expensive?

Blame it on what you want – there is no way to ignore the fact that fuel prices are increasing at a rate which is super scary. Also, air pollution levels are higher than ever in many major cities.Owning an electric vehicle seems like a wise option, doesn’t it? These zero-emission vehicles run on a battery and are easier to maintain. However, electric vehicles are more expensive when compared to fuel-powered ones and repairing or replacingthe broken partscan burn a hole in your pocket. Hence, when it comes to taking an insurance cover for an electric vehicle, you may need to shell out some extra money annually for car insurance renewal. However, when you have a good electric car insurance policy, the insurance company will cover your EV against a range of natural and manmade events and help keep your savings intact.

Why are electric vehicles more expensive to insure?

1. Electric vehicles cost more:

Electric cars are more expensive when compared to conventional or fuel-powered ones. Hence, their Insured Declared Value (IDV) is also high. The higher the IDV, the higher will be the car insurance premiums. Although electric cars cost more initially, owning one will prove to be economical in the long run as you can save on fuel costs over the years.

2. Repair costs are higher:

Electric vehicles have high-capacity batteries and expensive parts. Hence, their repair costs are also on the higher side. For instance, the cost of an EV’s lithium-ion batteryis more than half of the total cost of the car. Hence, repairing the battery or replacing it with a new one is an expensive affair. Similarly, the repair or replacement of any other part of an electric car can also cost huge bucks. Therefore, insurance companies charge higher premiums for electric car insurance.

3. Fewer number of qualified technicians:

Electric vehicles have some complex car parts that require special care and servicing. While conventional car mechanics are easily available in different towns and cities, the highly skilled ones for electric vehicles can be difficult to locate. And the available mechanics charge extra money for repairing EVs and replacing their parts. Since insurance companies cover the cost ofvehicle repair and parts replacement in case of accidents, fire, natural calamity or any other event covered under the policy, they charge higher car insurance renewalpremiums for EVs.

To make sure you're driving your electric vehicle in the most efficient and eco-friendly manner, refer to this Comprehensive Guide to Driving Electric Vehicles Properly.

How to lower electric vehicle insurance premiums?

To find a low-cost insurance policy for your electric vehicle, you can do the following:

• Buy insurance online:

This is one of the best ways to find a good and economical insurance cover for your EV. You can shortlist some good car insurance policies online and compare their inclusions, exclusions, add-ons, services and more to find a good and pocket-friendly option.

• Add security devices:

Another way of reducing insurance premiums is by installing security devices in your EV, such as an anti-theft device and safety locks. These devices increasethe safety of EVs and reduce the chances of theft. Insurance companies also reduce car insurance renewal premiums for vehicles with anti-theft devices.

• Go for voluntary deductible:

A voluntary deductible is the amount that a policyholder needs to pay from their pocket during claims. When you opt for a voluntary deductible, the insurance premium reduces by a certain percentage. If you are a responsible driver and your car is a new one, the chances of raising a claim should be low. In such cases, you can take car insurance with a voluntary deductible.

• Use the no-claim bonus:

Insurance companies offer a no-claim bonus to policyholders for every claim free year. This bonus can be in the form of reduced premiums or increased sum assured. Hence, if you are a responsible driver who drives safely and takes care of car maintenance, the chances of raising a claim will be low. In such cases, you can enjoy a no-claim bonus for every claim-free year. The accumulated no-claim bonus can help reduce premiums for EVs.

Conclusion

Thanks to advancements in technology, electric vehicles are likely to become more affordable in the coming years.However,as of now, these cars are expensive with higher maintenance charges. Hence, car owners need to pay some extra thousands for CAR INSURANCE renewal premiums. With car manufacturers striving hard to make affordable EVs, these vehicles may be available at lower costs in the future. This will help reduce the insurance costs as well.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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