In the past few years, the number of people adopting electric cars instead of petrol-diesel cars has increased rapidly. People are choosing EVs because of their lower running costs and better for the environment, but before buying an electric car, just looking at its price and charging costs is not enough. Insurance is also an important part of the total cost of an EV.

Third-party insurance is mandatory for all cars and there is not much difference in its premium between EV and petrol-diesel cars. But own damage cover for EVs can be expensive. The reason for this is the high cost of EVs, expensive parts and high repair costs.

How high can the EV premium be?

Many insurance companies charge EV premiums around 15-25% higher than petrol-diesel cars. However, in some cases the difference appears to be as high as 25-60% on online insurance portals. If we understand this by example, according to Karwal, on buying Tata Nexon, one has to pay around Rs 40 thousand for insurance and on buying Tata Nexon EV, one has to pay around Rs 50 thousand for insurance.

Because insurance is expensive?

1. High cost of EV

The biggest reason EV insurance is expensive is its purchase price. Electric cars are typically around 12-30% more expensive than equivalent petrol-diesel models. If the price of the car is high, its IDV i.e. Insured Declared Value is also high. This IDV plays a major role in determining insurance premiums. Therefore, expensive car insurance can also be higher.

2. The battery is the most expensive part

The battery is one of the most important and expensive parts in an EV. According to Digit General Insurance, battery replacement costs in many large EV models can be as much as 50-70% of the total cost of the car. According to Bajaj Allianz General Insurance, the cost of replacing the battery alone can reach ₹7 lakh depending on the model and battery capacity. In such a situation, the risk of battery damage increases the insurance premium.

3. Repair cost of EV is also high

EVs’ electric motors and high-voltage batteries can be more expensive to repair than regular cars. Many companies do not provide these parts separately for small parts or child parts. In such a situation, the entire core may have to be replaced. Although EV motors generally require less maintenance than petrol-diesel engines, the cost of repairs can be quite high if a fault occurs. Additionally, the equipment and specialized service centers required to service EVs are not readily available everywhere. Due to the lack of trained technicians, repairs can take longer and cost more.