Thanks to the continuous surge in fuel prices, the demand for electric vehicles is rising. Hence, the push towards electrification of vehicles is also higher than ever.
The sales of electric vehicles have increased by 20% in India in the last one year (2019-20). As the sales go up, so does the need for insurance to get financial covers against damages caused by accidents, theft, fire, etc. Just like other vehicles, electric vehicles also require an electric car insurance.
What are electric vehicles?
An electric vehicle is a motor vehicle that runs on one or more electric motors and can be charged using electricity. It can also run on a battery, solar energy or an electric generator that converts fuel to electricity. In India, the electric vehicles category includes electric cars, e-bikes, e-bus, e-autos, e-pick up, and e-motorcycles.
There are around 5 electric car manufacturers in India as of 2020, apart from brands making electric buses, three-wheelers, and two-wheelers. Most of the electric vehicles run on battery, but some work on hybrid technology. Such hybrid cars run on petrol or diesel, with a battery as a backup. But some of the rare variants of these electric cars run on hydrogen-powered electricity.
The electric cars can save up to seven times the petrol/diesel cost of conventional cars. In addition, these cars are known for their zero contribution to air pollution as they cause no harmful emissions.
Why do you need electric vehicle insurance?
Whether you own an electric car or the usual petrol/diesel-based vehicle, a car insurance plan is essential. It offers financial protection against damages to your vehicle caused by accidents. The insurance also covers you against liabilities arising from any property damage, fatality, or injury caused to another person in accidents involving your car.
If you are still on the fence about buying insurance for your electric car, here are some compelling reasons:
1. Legal requirement – Indian citizens are legally bound to hold at least a third-party vehicle insurance to be able to drive on public roads. This stipulation is under the Motor Vehicle Act, 1988. Driving without insurance is considered to be a violation of the law and the driver is liable to pay a hefty penalty.
2. Covers damages – An accident can lead to serious damages to the car and the repairs are expensive. Having a car insurance policy can offer the much-needed financial help in such hours of emergency. The insurance covers you against damages caused by accidents, natural calamities, acts of violence, and more. A comprehensive insurance policy also safeguards you from losses due to theft.
3. Personal accident insurance – Motor insurance policies often contain personal accident cover for the owner-driver, so you don’t need to buy one separately. In case of any unfortunate event or any permanent disability due to an accident, the insurer pays the sum insured. Thus, the insurance product offers financial security to your loved ones if they lose the support of your income.
4. Third-party insurance – With your electric car insurance policy, just like with all regular car insurance policies, you get third-party insurance, which is mandated by law in India. You can also opt to buy standalone third-party insurance if you are not willing to buy a comprehensive car insurance policy covering all contingencies. The third-party insurance covers you against any financial liabilities due to loss of life, injury, or property damage caused to a third-party. It takes care of all your legal expenses as well, leaving you worry-free.
To sum it up, whether you have an electric car or the usual petrol/diesel/ CNG-based car, having car insurance is your financial safety-net. Like all your valuable property, you should shield your electric car against damages due to accidents. And electric car insurance ensures that you do not end up paying the hefty expenses for repairs from your pocket. It also covers expenses incurred due to third-party damages.
In addition, the Insurance Regulatory and Development Authority of India (IRDAI) has now reduced the premiums of third-party insurance for an electric car by 15%.3 Overall, owning insurance for your electric car puts you in a win-win situation in return for a small premium.