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Why We Love EV Motor Insurance (And You Should, Too!)

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This year looks like the banner year for electric vehicles worldwide, especially in India!

With the Green India Mission raising awareness about the environmental impact of conventional vehicle use, electric vehicles (EVs) have significantly caught up in sales. As a result, these vehicles are gradually but steadily becoming more common on Indian roads. Be it cars or bikes, these electric-powered vehicles are changing the way people commute. Industry experts suggest that the demand for EVs will only increase in the coming years, making it critical to have electric vehicle insurance coverage in place.

If you have an electric car, you know that your insurance is similar to a petrol or diesel-powered vehicle. If you plan to buy an electric car, we urge you to read this blog for some insider information!

Here’s all that you need to know about EV and motor insurance.

What is an electric vehicle, or popularly known as an EV?

The basic and the most notable difference is that electric cars run on batteries. So, instead of an engine that runs on fuel, it is powered by rechargeable batteries. Usually, the term EV is used loosely to define vehicles that use alternate means of fuel, but EV falls into three main categories, i.e. conventional hybrids, plug-in hybrids and battery-electric vehicles.

• Conventional Hybrids (HEV) are vehicles powered by both, fuel as well as electricity. In these vehicles, the electricity is generated by the vehicle's braking system, whereby the heat produced is converted into electrical energy. Some conventional hybrids in India are Toyota Prius Hybrid, Honda Civic Hybrid, and Toyota Camry Hybrid. Maruti Suzuki, too plans to introduce its hybrid system in the market.

• Battery-electric Vehicles (BEV) are fully electric vehicle. This electric vehicle type does not have an alternate source of actuation other than motors and batteries. They are zero-emission vehicles with battery charged through an external source of power. Some of the 4-wheeler BEVs in India are Tata Nexon EV, Hyundai Kona Electric, Mahindra eKUV100, and 2-wheeler BEV include Ather 450, TVS iQube, Bajaj Chetak Electric.

• Plug-in Hybrid Electric Vehicles (PHEV) are electric vehicles that can recharge batteries through regenerative braking. Unlike HEVs, PHEVs can go longer before the engine has to assist in the propulsion of the vehicle. Some of the PHEV options available in India are Mahindra e-Verito, BMW i8 and Volvo XC90 T8.

Why is an electric vehicle insurance policy important?

Electric cars and bikes have levelled up Indians’ commuting experiences. With perks like noiseless driving, pollution-less commuting, and added savings from cutting out petrol and diesel use, it’s no surprise that they are quickly becoming the new-age modes of transportation. Nevertheless, the perks come at an additional cost to the vehicle owner. For instance, as these vehicles are built with advanced technology, their repair also necessitates hiring specialists and an increase in repair costs in case of damage. Similarly, the batteries of these cars or bikes and other specialized parts are expensive, implying a high replacement cost. In that case, having a vehicle insurance policy in place can save you from burning a hole in your pocket if there is any damage or depreciation.

No matter your choice of an electric vehicle, ensure you buy car insurance policy or two wheeler insurance policy for the following reasons:

1. Legal Mandate: The Motor Vehicle Act governs the laws related to motor vehicles in the country. The Act mandates that all vehicles have vehicle insurance to ply legally on public roads. If you fail to do so, the traffic police can penalize you with hefty fines.

2. Third-Party Liability: The roads are unpredictable and that can result in a collision or an accident. In the case of an accident claim involving other drivers, pedestrians or properties, you will have to shell out for the injuries or damages from your pocket. However, with a third party car insurance cover, you do not have to worry about any financial or legal liabilities.

3. Protection against Damages: In the event of an accident, your car might also be at the receiving end. Anyone who has some experience with car repairs would know that they do not come cheap, especially electric vehicles. Thus, whether the damage to your car is due to your mistake or someone else's mistake, a car insurance policy will take care of the repairs.

4. Personal Accident Cover: Car insurance policies also offer personal accident cover for the insured. This component comes into the picture if the insured passes away after an accident or incurs permanent damage. The nominees of the policy will receive the sum assured, which can offer some financial assistance to the family.

Is an electric vehicle insurance policy mandatory?

As per the Motor Vehicles Act, every car or bike driving on Indian roads must have at least third-party insurance cover. Because it makes no exception for electric cars or bikes, getting car insurance policy or bike insurance policy is mandatory for electric vehicles. However, given the expenses of repair attached to an electric vehicle, it is recommended to purchase comprehensive car insurance policy to cover own damages as well.

What to know about electric vehicle insurance policy?

As the electric vehicle market is still in its nascent stage, the general insurance industry has yet to introduce separate cover for EVs. At the moment, one needs to select from existing bike and car insurance plans available for petrol and diesel vehicles. And since insurance providers offer insurance for bike and car in accordance with standard guidelines for traditional vehicle insurance, you can choose between third-party insurance policy, standalone own-damage policy or comprehensive insurance policy.

However, IRDAI has recently mandated to incentivize the purchase of electric vehicle insurance policy. This means that, for electric vehicle car or bike owners, third party insurance policy in India will be 15% lower than the policy for petrol or diesel vehicles.

Bonus Pro-tip: 3 things to see before purchasing

While the insurance covers are the same for all types of vehicles, there are a few essential factors to consider when choosing a coverage option for your electric vehicle. Some of them are mentioned below.

1. IDV or insured declared value: IDV refers to the maximum claim value that an insurance provider agrees to pay if theft or damage of a vehicle is beyond repair. As electric cars and bikes are expensive, the loss sustained in such circumstances would also be high. As a result, the IDV must thus be sufficient to cover the loss in case of theft or damage.

2. Add-on benefits: When looking for add-on covers under an electric vehicle insurance policy, keep the costs in mind. Some of the electric vehicle-related costs include damage due to battery charging, leakages to the car battery, charging connector damage, vehicle towing to the nearest charging point, etc.

3. Cashless facility: Claiming becomes hassle-free if the plan includes a cashless facility, which allows for immediate repairs at partner stores if you are stuck midway due to a vehicle breakdown.

Conclusion

In a nutshell, electric vehicles, cars or bikes, are still nascent in India, and it will be a while before they become as popular as their petrol or diesel counterparts. But no matter the vehicle you opt you or the fuel or running capacity, ensure that you insure with an optimum vehicle insurance policy. A few clicks are all it takes to insure your vehicle today!

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

This blog has been written by:

Mukesh Kumar | Motor Insurance Expert | 36+ years of experience in insurance industry

A veteran in the insurance industry, Mukesh Kumar has the expertise of handling various functions like Business Development, Underwriting, Claims, Human Resources, Quality Management and Marketing. With rich knowledge of the industry, he loves to share his views on topics of insurance sector and takes special interest in educating people on advantages of having insurance.

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Few Other Articles:

• Car insurance for electric vehicles

• The next big green thing in auto industry - Electric Vehicles (EV)

• Increasing vehicle price may empty your wallet but not your motor insurance

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