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Though being an economical vehicle choice, electric vehicles are expensive to insure in comparison to other fuel powered vehicles. Here’s the list of reasons why electric Car insurance is quite expensive.
Reasons for high premium cost of an electric car.
Several factors have a direct influence on the premium cost of an EV vehicle and given below are a few of them.
Electric cars are expensive
One of the primary reasons why insuring an electric vehicle could turn out to be expensive is because this type of vehicle is expensive compared to other types of vehicles. Furthermore, this type of vehicle is loaded with a power inverter, thermal system, charge port and other parts which increase its cost. Since the parts of these vehicles are expensive, the insurance premium too turns out to be higher in comparison to petrol or diesel cars. Higher the pricing of the car, higher the IDV and hence, the premium.
Car parts are expensive
The most expensive part of an electric car is the lithium-ion battery which accounts for 50% of the overall vehicle cost. The battery alone can make a difference of lakhs of rupees. Not just this, the batters also require replacement after a few years, the cost of which is high. Due to this, the premium for this type of vehicle is also higher.
High level of maintenance
While electric vehicles have fewer mechanical parts compared to petrol and diesel cars, but owing to expensive and complex parts, the vehicle needs timely maintenance. A specialized mechanic is required to do the servicing job since the number of specialized technicians to service this type of vehicle is less. Due to this, the labour costs can turn out to be higher.
Tips to lower the cost of electric car insurance premium
Compare: One of the best ways to reduce the cost of your EV insurance is to compare insurance prices on an insurance aggregator’s platform. Do research on the policy coverage and opt for the one that best suits your pocket and your requirement.
Opt for voluntary deductible: This is a fixed amount that is determined at the time of policy purchase. This amount has to be borne by you at the time of claim. This helps you reduce the premium. Higher the deductible, lower the premium you will have to pay.
Claim amount- Rs. 50,000
Consumable parts and component deduction- Rs. 4,000
Voluntary deductible amount- Rs. 6,000
Total claim amount- Rs. 40,000
Install an anti-theft device: Installation of an anti theft device gives the insurance company a sense of assurity of reduced chances of vehicle theft due to which you can get a discount on the premium.
Use the no claim bonus: NCB is the reward that the insurance company gives to the policyholder for making no claims in 1 policy year. This discount can go up to 50% for registering no claim for five consecutive years. You can use the accumulated NCB to get a discount in the premium of your electric car policy.
IDV- Rs.3,00,000
Comprehensive premium without NCB- Rs. 9,831
NCB discount- 20% i.e. Rs. 1876
OD premium with NCB- Rs. 7,505
Conclusion
India’s EV market is expected to grow by 90% and touch $150 billion by 2030. Since these vehicles are environmentally friendly, they are fast becoming popular. With an increasing demand for electric vehicles, the insurance cost will also reduce. However, when driving an EV vehicle on Indian roads, ensure that you do not forget to keep your e-car insurance policy with you.