Choosing EVs To Beat Pollution? Know The Insurance Rules Before Going Ahead

Electric vehicles present unique vulnerabilities, from batteries and components to cybersecurity concerns, requiring insurance policies to go beyond the conventional scope. Learn more
Car Insurance Policy, Electronic Vehicles,
Car Insurance Policy, Electronic Vehicles,

Post Diwali, the national capital and major cities are covered with a thick blanket of smog. While bursting crackers have been the major culprits, several cities have seen elevated pollution levels even before Diwali. The Delhi government, for example, has banned plying diesel vehicles in the city for some time now. In such times, electric vehicles (EVs) appear to be the way forward.

If you are among those who want to reduce your carbon footprint, you can choose EVs as your next car. However, just like any other car, you can't drive your EV out of the showroom if you don't buy insurance. Here's how the insurance coverage for these eco-friendly machines differs from their traditional fuel counterparts.

Premiums: Electrifying Costs

Animesh Das, Chief Underwriting Officer at Acko, explains that one of the primary distinctions lies in the cost of insurance premiums. He notes, "EV vehicles are slightly costlier; thus, the premium is slightly higher." This can be attributed to the higher market value of electric vehicles than their fueled counterparts. As EV technology continues to evolve, insurance companies adjust premiums to reflect the increased value and complexity of these eco-conscious rides.

Accessories And Vulnerabilities

The advent of EVs brings with it a new set of accessories, including chargers and screens. Unlike traditional fueled vehicles, these accessories are integral to the functioning of an electric vehicle and are equally exposed to accidents. Das advocates for comprehensive coverage, stating, "There are additional accessories with EV like charger, screen, etc., which are equally exposed to accidents and should be covered," This shift in coverage reflects the unique vulnerabilities that EVs present, requiring policies beyond the conventional scope.

Battery Breakdown: A New Dimension

In the realm of fueled vehicles, battery costs were relatively low. However, the scenario changes drastically with EVs. Das points out, "In fueled vehicles, battery cost was low, but EV batteries are more than half of the cost of the vehicle." Given the substantial investment in EV batteries, it makes sense for consumers to consider separate coverage for these essential components, akin to a battery warranty. This ensures protection against potential breakdowns and high replacement costs, offering peace of mind to EV owners.

New Horizons: Cyber Insurance For Connected EVs

With EVs emerging as fully connected vehicles, a novel dimension in insurance coverage comes to the forefront. Das suggests, "We may also see new types of coverage in EVs as these are fully

connected vehicles like cyber insurance." The integration of advanced technologies in EVs opens up possibilities for cybersecurity threats. As these vehicles become more interconnected, the need for protection against cyber risks becomes imperative, paving the way for innovative insurance solutions tailored to the digital landscape of EVs.

Limited Service Capabilities: Insure For Safety

In the nascent stage of the EV space, service capabilities are still evolving, predominantly with original equipment manufacturers (OEMs). Das emphasizes the importance of being proactive, stating, "Given EV space is at an early stage, there are limited service capabilities (mostly with the OEM); thus, it's important to buy insurance/warranty products to be safe." This highlights the need for comprehensive insurance and warranty products to safeguard against potential service limitations and uncertainties in the emerging EV market.

As the automotive landscape undergoes a green transformation with the rise of electric vehicles, understanding the distinctive features of insurance coverage becomes paramount.

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