EV Insurance: Tips to comprehensively insure your electric vehicle in the coming new year – EQ Mag

Insurance for Eelectric Vehicles (EVs): Electric vehicles are advanced pieces of machinery that need protection exceeding third-party liability insurance. Thus, a comprehensive insurance plan is more fitting as it completely shields the insured vehicle from various risks, particularly beyond damages and losses caused due to incidents other than a collision.

Insurance for Electric Vehicles in India: Electric vehicles, or EVs as they are commonly known, have undoubtedly dominated 2022. If the industry buzz is anything to go by, the EV fascination looks like it’s here to stay even in the year to come. The industry reports project an impressive 40-49 per cent CAGR growth rate for the Indian EV market. The remarkable uptick in recent EV sales clearly indicates the growing popularity of this environmentally-friendly mode of transport as the future of mobility.

As a result, if you currently drive an EV or are thinking about switching to one, you should first know that electric vehicle, whether hybrid or fully electric, requires a motor insurance policy, just like regular vehicles do. Since there is no specialized policy yet for them, these get covered under the same law that mandates all vehicles to be insured under third-party liability insurance. This policy shields the insurer against any third-party damage to property or bodily injury caused by the vehicle. But, for EVs, the insurance costs vary from a standard policy. Thus, IRDAI has directed a 15 per cent discount on third-party insurance coverage for EVs to ensure absolute protection. Here’s how to comprehensively insure your EV –

Understanding comprehensive insurance for EVs

Electric vehicles are advanced pieces of machinery that need protection exceeding third-party liability insurance. Thus, a comprehensive insurance plan is more fitting as it completely shields the insured vehicle from various risks, particularly beyond damages and losses caused due to incidents other than a collision. These include accidents, fires, and natural calamities like earthquakes, floods, etc. Furthermore, it also shields against the cost of EV spare parts and their replacement, repair, and servicing costs, which can be exorbitant if borne out of pocket. Therefore, comprehensive insurance is ideal for EV owners for maximum financial protection and safety.

So, here are the tips for comprehensively insuring your electric car:

Set the appropriate IDV

The maximum sum assured fixed offered by an insurance company in the case of a complete loss or theft is known as Insured Declared Value, or IDV. Hence, it is essential to have an appropriate IDV set when purchasing the policy. However, in the case of comprehensive policies, the IDV is mainly limited to a predetermined policy limit. Thus, it is critical to insure your electric vehicle adequately, or you will face a financial burden in the event of theft or damage that cannot be repaired.

Select the suitable Add-Ons

Another advantage of a comprehensive insurance policy for your EV is that it enables the purchase of several add-ons that amplify the coverage offered. Though these are available at a premium, adding them negates your own expenses. So here are a few essential ones:

Roadside assistance: this helps in the event of a car breakdown. Hence, with this rider, the insurance provider will provide aid ranging from arranging for a mechanic, towing the vehicle, an alternative conveyance, fuel delivery, etc. Look for insurance companies that provide 24-hour service.
Zero depreciation coverage: Depreciation of your vehicle begins from the instant it is driven out of the dealership. It devalues to anywhere between 20 per cent and more of its original value by the end of the first year. Thus, by including this rider, the insurance provider will settle the claim amount without considering the depreciation on various parts of the car. Hence, including bumper-to-bumper coverage, as it is commonly known, will increase the payable claim amount.
NCB cover: A no-claim bonus, or NCB, is a reward from an insurance firm for taking good care of the insured car. Each claim-free year results in savings for the policyholder in the form of either attractive discounts or lower premiums on buying or renewing the insurance. For instance, as per regulations, you are eligible for up to a 20 per cent discount in the first year and up to a 45 per cent discount after four years if no claims are made. This incentive prompts the owner to drive their prized possession safely and cautiously.

Opt for comprehensive policy

Ideally, a comprehensive car insurance policy is ideal for new car owners, as it safeguards against both incidental damages and third-party liabilities. Furthermore, electronic vehicles use entirely new operating technology; thus, having this policy will protect you from damage or theft. Also, if you reside in a metropolitan city, this car insurance policy will guard your car from the risk of accidents, traffic, etc.

To conclude, it is ideal, especially for electronic vehicles, to always go for a comprehensive plan to protect them better. It provides financial protection against several liabilities while also adding to your peace of mind. Therefore, before purchasing the policy, always compare the various available plans online and know the inclusions and exclusions. Furthermore, the premium for comprehensive insurance policies differs from insurer to insurer, depending on the model and add-ons selected. Hence, read the fine print and comprehend any hidden expenses before choosing your preferred motor insurance.

Source: PTI