Automotive

Electric Car Insurance: Is it Cheaper than Regular Car Insurance?

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Until recently, electric vehicles ruling our roads seemed like a distant dream. However, things are changing at a fast pace mainly due to three reasons—the advent of better technology, increased support from the Government and popular car brands launching electric cars within an affordable range. 

Increased sales of electric cars have boosted the demand for car insurance; prices and policies are specifically designed for electric vehicles today. 

Why are Electric Cars Becoming More Popular?

Today, more and more people are aware of the growing threats of environmental change and are willing to do their bit in protecting the planet. Vehicular pollution is among the prime factors causing global warming, thus the popularity of electric vehicles is on the rise. Here are some reasons why electric cars have so many takers suddenly:

1. Enhanced performance

Slow and underpowered, the new makers have forayed into better technology and refined manufacturing processes. Today’s electric vehicles can travel hundreds of kilometers with a single charge. Also, the performance rate of these vehicles has significantly improved over the years.

2. Government support

The new government policy has pestered many new electric and hybrid vehicles to foray into the manufacturing of electric vehicles at low costs. The support from the Government comes in the form of a percentage of sales that comes from electric cars. 

3. Advanced technology

With advanced features such as a touch-screen interface and self-driving capabilities, electric cars come loaded with futuristic capabilities. With such features, autonomous vehicles have a bright future on our roads.

4. Lower costs

The parameter of a low running cost of electric vehicles has made them more accessible to the general public. This has also helped in reducing the cost price of the car.

However, while embracing the change, the basic knowledge of electric vehicle ownership is vital. It is mandatory to have car insurance to drive your car on Indian roads. Therefore, you must insure your electric car to be able to use it. However, car insurance for electric cars is slightly different from that for regular cars.

What is Electric Car Insurance? 

Electric car insurance protects the car from third-party liabilities and own damages caused due to an accident, or natural and manmade calamities. Since electric car insurance is just gaining popularity in India, it could be a tad bit difficult to get a better electric car insurance price compared to a policy for a regular car.  

Why Do You Need Electric Car Insurance?

Usually, electric cars have fewer complications compared to regular cars. However, in case of damage or need for repair, electric cars’ highly complex system can cause a dent in your pocket. In such situations, having electric car insurance can prevent you from digging into your savings. Compared to regular cars, electric car insurance price is on the higher side. But, it will come in handy in the face of a mishap involving your precious electric car.

Why is Electric Car Insurance Expensive?

Although electric cars help you reduce fuel costs, they are expensive to insure. There are many reasons for this. Some of them are:

1. Expensive car parts 

The primary reason for a higher car insurance price is the expensive car parts used in electric vehicles. Although car manufacturers are striving hard to reduce the cost of manufacturing electric cars, it will take some time before they can compete with regular cars. This high cost reflects on the electric car insurance price as well. 

2. Expensive batteries

The battery is the most expensive part of an electric car. It accounts for 60% of the value of the car. Electric vehicles require high-capacity batteries. However, they come with an expiration date. Due to this, the batteries must be replaced at regular intervals. Replacing or repairing the battery is a costly affair. Meanwhile, regular car batteries are cheaper and last longer, thus bringing down the replacement or repair costs. Unlike regular car insurance, electric car insurance price includes coverage for battery repair and replacement when needed. This makes the policy more expensive. 

3. Expensive labour 

A specific set of knowledge and skills is required to repair and maintain the complex parts of an electric car. Because of the low availability of skilled labour, the labour rate is high. This increases the policy premium costs for electric cars significantly.

4. Expensive supply chain

Slowly and steadily electric cars are gaining popularity in the Indian market. However, it will take some time before it becomes the go-choice of car for the majority. Until then, electric car manufacturers will have to face challenges in the supply chain. This adds up to the cost of the insurance plan.

5. Expensive infrastructure

Electric cars require expensive infrastructure. Since electric car sales are just picking up, most manufacturers are reluctant to invest in high-cost infrastructure. These factors directly lead to the high pricing of electric vehicles. Consequently, their insurance rate is also high.

The Final Word

Critical features like freedom from fuel price hikes, quieter engines, reduced pollution levels, and great mileage are establishing electric vehicles as the future of the automobile industry. It is just a matter of time before electric vehicles will replace traditional fuel vehicles on Indian roads. 

Electric vehicle manufacturers are investing considerable amounts in refining their infrastructure and supply chain. Almost all top automobile brands in India have already started offering electric cars to their customers. Hence, the cost of car insurance for electric cars will decline soon.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to policy wordings and prospectus before concluding the sales.