In India, electric vehicles (EVs) have begun to gain traction due to steadily rising fuel prices and growing environmental concerns regarding the high carbon emissions of internal combustion engine (ICE) vehicles. The increased adoption of electric vehicles has also been aided by low maintenance costs and government-friendly policies.
In addition, encouraging steps are being taken by the central and state governments to construct a transportation system that is cleaner and more environmentally friendly in order to support the objective of making India the leading market for electric vehicles by 2030.For instance, the government’s new EV policy on battery swapping and interoperability standards, which was announced in the Union Budget for 2022, will speed up the country’s adoption of EVs.
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In accordance with Section 80EEB, the government also provides individuals with a one-time tax exemption of up to Rs 1.5 lakh for interest paid on an EV vehicle loan. In March 2020, the Insurance Regulatory and Development Authority of India (IRDAI) also asked insurers to offer a 15% discount on motor third-party insurance premiums to encourage EV users.
In 2021, a total of 3.11 lakh electric vehicles were sold, according to government data; In 2022, this reached 4.19 million. The more extensive reception of EVs in the nation has prompted more popularity for EV protection. Electric vehicles, like those with internal combustion engines (ICE), need insurance to drive on Indian roads. Own Damage and Third-Party Liability are the same kinds of covers that are available for electric vehicles as they are for ICE vehicles.
Accidental damage, fire, natural disasters, riots, theft of the insured vehicle, and injuries or damages to third parties are typically covered by EV insurance. The standalone third-party cover, the standalone own-damage cover, the comprehensive cover, and the bundled long-term cover for new vehicles are all available from modern insurers.
When it comes to purchasing EV insurance, the following advice will assist you in making an educated decision.
Complete coverage: Fuel-based vehicles are less expensive than electric ones. Therefore, it is advised to select a policy that will completely cover the vehicle as opposed to a third-party cover, which will only cover damages to a third party’s vehicle, person, or property. Also, look for insurers’ add-on covers for more protection. The costs associated with various add-ons may vary from insurer to insurer.
Premium: Contrasted with petroleum and diesel variations, exhaustive insurance contract charges for EVs are moderately higher in light of the greater fix costs and the expense of battery substitution. This is because EVs use cutting-edge technologies, which means they cost more. However, customers can receive a 15% discount on third-party premiums, allowing for competitive insurance rates for electric vehicles. However, keep in mind that the premium will also be affected by the location of the policy and the cost of the automobile.
Add-on for zero-depreciation: High-tech components for electric vehicles will be more expensive. During a claim, zero depreciation add-on coverage is beneficial because it covers all damages and eliminates the depreciation-based calculation. For instance, batteries depreciate much more rapidly than a vehicle’s traditional value.
The effect of location on premium: The policy’s underwriting is directly affected by the vehicle type and location. For instance, the premium may be higher if certain locations are prone to vehicle component theft, such as battery theft. The insurance offered may have higher premiums than those offered in other parts of the country due to restrictions on underwriting.
Declared Value of Insurance: The insured declared values (IDV) offered by various insurance companies vary. It is crucial to evaluate the IDV’s current market value prior to checking it out from the insurer of your choice. Make sure to look for an insurer that offers an IDV that is closest to the market value when you compare electric vehicle insurance policies online. In the event of theft or total loss, this will be helpful.
Add-on for Pay as You Drive (PAYD):When compared to gasoline-powered automobiles, electric vehicles are typically driven primarily within the city limits. Customers of PAYD can take advantage of a lower premium for vehicles that are driven fewer times per year .You can save money on your premiums by looking for insurers that provide this coverage.
Other benefits offered by the insurer, such as cashless repair, smartphone-enabled self-inspection, and the option to customize IDV, should be taken into consideration when purchasing insurance.
The availability of add-on options, customer support, and the insurer’s Claim Settlement Ratio (CSR), which is the total number of claims settled by the company, are also important because they will help ensure that customers have a positive experience. The EV market in India is still in its infancy, but as the charging infrastructure gets better, more people will choose electric vehicles in the future.