Electric vehicle (EV) and hybrid electric vehicle (HEV) owners in India can now avail of an insurance product specifically designed for their batteries. Magma HDI General Insurance (Magma HDI), a general insurance company, has now launched a ‘Battery Secure Add On’ insurance product specifically for batteries of EVs and HEVs, the company announced in a press release recently.
In this context, it would be important to understand the insurance products for batteries.
EVs in India are gaining popularity. The government has also drafted policies to make EVs more popular among customers. Though EVs account for only 4.7 per cent of total automobiles sold in India, the segment saw a growth of over 200 per cent year-on-year (YoY) in FY23. In FY24 (until October 2023), 880,000 EVs have been sold in India with October seeing sales of 140,000 EVs. Technologically, EVs differ a lot from internal combustion engine (ICE) vehicles. The power source, transmission system, curb weight, range, etc varies for an ICE vehicle and an EV.
Says Mayur Kacholiya, head, motor product and actuarial, Digit General Insurance: “Battery forms one of the major components of an EV and accounts for 60 per cent of the vehicle’s cost. Hence, any major damage to the battery might mean replacement of the entire battery unit, in cases where repair is not possible. Consequential loss seen, say, due to rat bite, etc is also typically observed to be higher in the case of EVs. Besides, EVs also have additional accessories, such as chargers, which are expensive. A typical own damage (OD) motor insurance policy might not cover the battery in a comprehensive manner. EVs and insurance for EVs is comparatively a newer segment in India. However, some insurers are offering specific add-on covers for EVs to protect the vehicle battery more comprehensively and to cover these anomalies that are specific to an EV.”
Battery Warranty: According to Animesh Das, Chief Underwriting Officer, Acko General Insurance, battery warranties ensure that if the battery fails prematurely or doesn't perform as expected, one can get a replacement or repair at no additional cost.
“At ACKO we have an offering that provides an extended battery warranty which is designed to boost EV affordability by enabling banks to lengthen loan terms and reduce monthly instalments. This policy safeguards battery life for up to four or five years and provides performance coverage for up to 60,000 km,” he says.
Battery Insurance: Some insurance companies offer specialised coverage for batteries, especially for expensive and high-value batteries used in EVs or renewable energy systems. This type of insurance can protect against various risks, such as theft, damage, or unexpected loss of capacity. It provides financial protection and peace of mind for EV owners.
The availability and terms of these insurance products can vary depending on the type of battery and its intended use. Thus, It’s essential to carefully read and understand the terms and conditions of any battery insurance or warranty to ensure you get the coverage you need.
The battery product add-on covers consequential losses suffered by the battery or the drive motor and/or electric motor.
Says Gaurav Arora, chief underwriting, claims property & casualty, ICICI Lombard: “Here, the battery covered is the traction battery, which powers the vehicle’s movement and differs from the starting/ignition batteries. Any consequential losses due to short circuit or seepage of water is covered under this add-on, subject to the admissibility of the claim as per policy terms and conditions.”
The coverage may differ for different companies and it is recommended to go through the coverage details. However, typically, battery damage is covered in case of sudden power surge during charging, water ingress, short circuits, etc.
According to Das, EVs and HEVs are not always treated the same in terms of insurance coverage.
He says: “While both types of vehicles have electric components, there are key differences. EVs are fully electric and rely solely on electric power for propulsion. They typically have larger, higher-capacity batteries, and some insurance providers may offer specialised coverage for EV batteries due to their higher cost. In comparison, HEVs combine an internal combustion engine with an electric motor and a smaller battery. Insurance for HEVs may be more similar to traditional-fuelled vehicles, with coverage for both the conventional engine and the electric components.”
Insurance coverage can vary among providers, and the type of coverage for EVs and HEVs may differ based on factors, such as the vehicle’s make and model, the battery capacity, and the specific insurance policy. Thus, it’s essential to discuss your unique needs with your insurance provider to ensure you have appropriate coverage for your electric or hybrid vehicle.
To begin with, it’s essential to promptly contact your insurance provider, inform them of the problem, and provide crucial information, such as the policy number for raising the claim. Documenting the issue through photographs or videos can help support your claim. Reviewing your insurance policy is the next step, as it will clarify the coverage for battery-related issues and highlight any applicable deductibles or limits. Completing any necessary claim forms and providing the requested information is crucial to moving the process forward. In some cases, an insurance adjuster may inspect the issue to assess the extent of the damage. Once your claim is approved, the insurance provider will guide you through the repair or replacement process, which may involve using preferred service providers or shops. Payment or reimbursement for eligible expenses will follow, based on your policy terms.
Apart from all the general exclusions that are applicable for any vehicle insurance, there could be a few EV or battery-related exclusions that the insurer may apply. For instance, if the battery charging or battery health is not done or maintained as per original equipment manufacturer (OEM) guidelines, or any repair has been carried out from any unauthorised place without prior approval, it could be lead to a claim rejection. Any claims related to loss or damage due to general wear and tear are also
not typically covered by the insurer. The exclusions in EV add-ons may differ from insurer to insurer. Hence, make sure you read and understand all the exclusions carefully before buying the add-on cover.