Insurance Article, The Insurance Times 2022, The Insurance Times October 2022


  1. Prologue:

The Assessment Report (AR6) of the Intergovernmental Panel on Climate Change (IPCC) evidently states that human activity is causing unprecedented, and sometimes irretrievable &irreversible, climatic changes. That report says that the impacts of climate change are already evident: with the increasing temperatures, more droughts and floods, more extreme weather events giving rise to tornados/cyclones/thunder-storms, rising sea levels, and ocean acidification. These changes are causing serious problems for livelihoods and the well-being of persons all around the world.

According to the World Health Organization (WHO), India has the world’s worst air quality. In 2020, even during the Covid crisis with national and state lockdowns, 36 cities out of 50 cities which had unhealthy levels of air quality were identified from India. The vehicular pollution arising from the increasing stock of private vehicles, especially internal combustion engines (ICE) has contributed significantly to deterioration of air quality in Indian cities. The increase in ICE vehicles stock has led to disastrous results.

Scaling up India’s ambitious agenda to combat climate change, Prime Minister Narendra Modi announced five “Amrit Tatya” at the COP26 Summit including the target to attain net-zero emissions by 2070. Delivering the National Statement at the COP26 Summit in Glasgow, he said India will increase its capacity of non-fossil energy capacity to 500 GW and meet 50 per cent of its energy requirements through renewable energy by 2030.

The Indian automobile industry has witnessed some tectonic changes during the last few years. Some of these changes are increasing penetration of electric vehicles, innovative connectivity features in cars, digitalization of entire processes. Toll tax process is being abolished and now onwards when your vehicle will touch any National High Way, the CCTV Camera will immediately identify the vehicle and the corresponding tax will be debited automatically from the bank account of the owner of the vehicle. The most noteworthy change among these is the increasing adoption of electric vehicles (EVs). Despite the COVID-19 pandemic, electric vehicles (EVs)manufacturers sold 5,32,485 units in India during the last two financial years. With the Government pushing for complete electric mobility &continuous rising fuel prices, these figures will expand by 26% between 2021 and 2023.

So, if you are planning to buy a new car soon, you should start looking at the futuristic Electric Vehicle (EV) options. Almost all top automobile brands in India have started offering electric cars to their customers. You can select from a range of impressive options from some world-renowned car manufacturers.

At the same time, you need your car insurance for covering your Electric Vehicle to ply on the road covering under a basic cover (mandatorily the Third-party Liability i.e., Act-only policy must be taken by you for covering fatal damage / grievous heart of the passersby on the road) from any of PSU or Private General insurance companies in India (availed under either on-line/ off-line mode) to protect against:

  1. Accidents: Damages and losses that may arise out of accidents and collisions with the other vehicles, tree and / or other street side objects.
  2. Theft: Covers for the losses incurred when your car is unfortunately stolen.
  3. Fire: Damages and losses caused to your car due to an accidental external & internal fire due heat/flame.
  4. Natural Disasters: Damages and losses to your car in case of natural calamities such as floods, cyclones, etc.
  5. Personal Accident: If there is a car accident and unfortunately, it leads to death or disability of the owner
  6. Third Party Losses: In cases where your car causes damages and losses to someone else, their car or property.

Although the cost of buying electric car insurance is on the higher side, there are many advantages to purchasing an electric car. Some of them include low maintenance charges, freedom from fuel price hikes, and reduced pollution levels. Moreover, you can get EV car insurance discounts by buying an online policy and installing anti-theft devices in your car.

FAQs about car insurance for electric vehicles (who considers to buy):

✓ Do you have to get car insurance for your electric car in India?

✓ Which type of insurance is best for your electric car?

✓ How is the premium calculated your electric car insurance?

✓ Does electric vehicle insurance cost more than insurance for petrol or diesel vehicles?

✓ Are the covers of ICEs& EVs same & adequate to cover the actual requirements?

  • What perils, hazards, risks and accidents are available to the car owner, driver, occupants & third parties.

In the last few years, electric cars have been creating a buzz around the world and for good reasons. With climate change looming over us, switching to electric car is the best decision you can make for yourself and future generations. They reduce harmful air pollution and greenhouse emissions, and some parts of these cars are made from eco-friendly or recycled materials, reducing the burden on the planet.

As per a NITI Aayog report, India could save 64% of energy demand for road transport and 37% of carbon emissions by 2030 by pursuing a policy of shared, electric, and connected mobility.

While the momentum for upcoming electric cars in India is just taking off, it holds a promising future with the government taking some encouraging steps to further this movement. For example, the GST on a Li-ion electric car battery has been reduced from 28% to 18% to promote EVs.

Insurance regulator IRDAI has come up with a mandate to incentivize electric car owners and work towards a sustainable environment. Effective from June 16th, 2019, Mandatory third-party car insurance for private electric cars in India has been made 15% lower than that of general private cars of similar type. Certain state governments have extended tax incentives on the registration of hybrid and electric cars in India.

Many leading vehicle manufacturers have launched electric cars in India. From Mahindra to Tata to Hyundai to MG, the options are steadily growing. Additionally, there are many upcoming electric cars in India to watch out for from other top brands such as Lexus, Nissan, Porsche, Maruti, Audi, Tesla, etc. In fact, 21 new electric cars in India are expected to be launched in 2020-21.Currently, the electric car price in India starts around Rs 7 lakh and go all the way up to Rs 24 lakh. The most economical one at the moment is the Mahindra electric car e2oPlus, which is priced at Rs 7.46 lakh.

Meanwhile, the Hyundai electric car Kona Electric is at the other end of the spectrum, at about Rs 24 lakh. When it comes to a moderate electric car price in India, you can find the Tata Electric car Tigor (about Rs 11 lakh) and Tata Nexon (around Rs 15 lakh) in the mix. However, as a leading brand in India, the Maruti electric car WagonR Electric and the Futuro-E are among the most awaited models.

As of now, there is no specialized insurance for e-vehicles, so you have to buy the same insurance as for other petrol or diesel cars. However, this is soon set to change. With the demand for upcoming electric cars in India on the rise, car insurance providers are developing bespoke insurance options that primarily cater to these variants.

For instance, Tata AIG plans to launch the Auto Secure e Vehicle Comprehensive Policy, which is designed for electric cars, as it aims to cover ‘own damage’ as well as damage caused if the electric car battery bursts while charging. It will also cover the standard third-party liability for damage to property and death or bodily disability.

Several gaps in the four-wheeler EV market such as a limited number of products, high prices, insufficient battery promise, low performance and an underdeveloped charging ecosystem are yet to be filled. Given these impediments, the growth of EV four-wheelers is expected to lag behind other segments. Sales are expected to pick up once these gaps are plugged.

The light mobility segments of 2/3-wheelers and commercial cars will be leading electric vehicle penetration in India by 2030. The reach of electric cars in the personal mobility segment will be only 10%-15%. However, electric cars for ride-sharing and taxis may see traction of 20%-30%, according to a KPMG and CII report titled ‘Shifting gears.’By the end of this decade, the three-wheeler adoption is expected to be around 65%-70%. Electric two-wheelers, with a plethora of start-ups offering different ranges of products at an attractive price and ownership models, are expected to have only 25%-35% penetration.

Their price and fuel economy make them commercially more viable.

This development is similar to that in China, where electric bikes and scooters laid the foundation for growth. Intra-city transport buses are also ripe for EV adoption. These segments are likely to be followed by fleet cabs, and then others.

India is the largest two-wheeler market, with more than 80% of coming from the segment. The penetration of EVs in the four-wheelers segment has remained extremely low at ~0.1%.

Several gaps in the four-wheeler EV market such as a limited number of products, high prices, insufficient battery promise, low performance and an underdeveloped charging ecosystem are yet to be filled. Given these impediments, the growth of EV four-wheelers is expected to lag behind other segments. Sales are expected to pick up once these gaps are plugged.


To address these issues the central ministry proclaimed a goal to transition from new sales of ICE (Petrol & Diesel) vehicles to 100% plug-in electric vehicles (EV) by 2030. The government is also aiming to transmute India into a global hub for electric vehicles manufacturing. In 2019, Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) II scheme was adopted. It is important to note that FAME II policy which is the umbrella policy for India has been designed considering demand side incentives, where 86% of the funding is set aside for consumer incentives for electric vehicles (EV) purchases and 10% is allocated to fund charging infrastructure. Prior to the FAME II scheme, in the FAME I, the government had supported adoption of 2,78,000 EVs in different forms with a total incentive of INR 343 crore. Electric Vehicles are becoming a central point for India’s environment, energy and industrial policy – all being considered &combined.

Out of 28 States & 8 Union Territories, about 20 states & 2 UTs in India have already come up with either a draft or final state level electric vehicle policy, in all these undertaken policies have overall single-point aim isto promote India’s vehicles’ transition from ICEs to EVs. The objectives of each state level policy will vary to some extent but some common objectives that these projects include is to solve air quality issues, help in climate change mitigation, reduce dependence on oil imports and promote development of Electric Vehicles (EV)Industry. Almost all of the state policies prioritized 2 & 3 wheelers, public transportation and job creation.Governments have affirmed Transformation relating to 4 Wheelers’ & Commercial Vehicles from ICE to EVs will be taken on hand in the long run well within 2030 – to be asserted strongly.

However, these policies vary in terms of their targets, supply side incentives (i.e., manufacturing) and demand side incentives (consumer and charging infrastructure investments). Andhra Pradesh EV policy for example aims to have 10 Lakh EVs on the road by 2024. Top of it is a complete reimbursement of road tax and registration fees on sale of EVs until 2024. A strategic replacement of public transport automobiles in four cities by 2024 and by 2030 is mandated in the whole state. Create charging infrastructure (1 lakh charging stations) both for fast and slow charging by 2024 and establish a public awareness campaign to encourage also behavioural change. Gujarat on other hand aims to promote 100,000 EVs on road by 2022, which includes 80,000 nos. two-wheelers, 14,000 nos. three-wheelers, 4,500 carsand 1,500 buses – here; the Government is being resolved with 100% exemption from registration fee and 50% exemption from motor vehicle tax, also 100% exemption from electricity duty for Electric Vehicles’ charging stations. The state also provides subsidies to supplement the national-level FAME II scheme and it will match the number of charging stations allocated by the Department of Heavy Industry (DHI), as well as subsidies provided under FAME II being involved in a most fruitful networking system.

  1. Requirement-SideLanding:

From consumers’ standpoint several studies recommend that the differences in the features of EVs and ICEs can have stiff barriers to EV adoption. Research studies suggest that the short driving range of EVs is a significant barrier to quicker adoption. Moreover, requirement of long battery recharge time and lack of charging infrastructure affects the usual demand. However, technological developments have led to longer EV driving range, short recharge times and increase in charging infrastructure may become smaller issues in the long run.

Also, the cost of EV being higher than ICEs,is another issue for adoption. Significant drop in EV cost will increase the demand and help achieve the 2030 target for India. Though it is important to note that there are concerns with regards to battery life and consumers considering EV may depreciate in value more quickly than ICE vehicles, in terms of usage. However, there are factors such as high environmental friendliness, smooth &fast acceleration, lower maintenance fueling costs as primary motivators for adoption of EVs.

In addition to the above-mentioned perspective of consumer challenges, there are also technical challenges to the adoption of EVs. In particular, charging infrastructure, developing this infrastructure also faces barriers. In some cases, high land rent prices, lack of available land on which charging infrastructure can be installed, additionally intensive cost of purchasing and installing EV charging equipment involving high cost of commercial electricity and stability of the grid in those areas or states. As well as the companies involved for establishing charging infrastructure have difficulty in creating sustainable business models as the profit margins are lower on electricity sold. Lack of local supply chains for parts and components used for manufacturing EVs and EV batteries creates barriers for local manufacturing. As these manufacturing facilities require large capital investments, which has high risk.

Research shows that automakers are unwilling to make these investments owing to technological uncertainties especially with regards to battery technology. Battery-as-a-service business model was a new policy initiative that was introduced by the Ministry of Road Transport and Highways (MoRTH) that allows for sale of EV without the pre-fitted batteries. MoRTH main argument for this policy incentive is to delink the cost of battery and the vehicle, as batteries can account for almost 40% of EVs cost.

However, the notification caused some confusion among the automakers. It was not clear that EV sold without batteries would qualify for subsidies under the FAME II scheme. Also, the distribution of the subsidy between the automakers and DISCOMs was unclear. Automakers also needed clarification on potential issues related to battery standards, safety, warranties and integration. Current all the 20 state EV policies have taken into consideration the reuse or recycling of batteries. However, the details of the process of recycling or reuse of batteries is not explained by any state, which could create another environmental issue if details of these are not yet vividly clarified in principle by the policy making bodies of Central and State Governments.

Currently requirement-side challenges are being addressed by policymakers through various instruments such as provision of subsidy to the consumer through direct money transfer in order to make it more affordable. Evidence suggests that financial subsidies have increased and encouraged consumers to purchase EV. Currently India imposes 100% import duty on fully imported cars with CIF (Cost, Insurance and Freight), and it doesn’t treat EV separately from ICEs. Therefore, the government needs immediately to subsidize EVs and ensuring purchasing ICEs being relatively expensive via imposing higher taxes on them. This will help the government to generate revenue and which further can be utilized for improving infrastructure demand.

Example as solution as adoptedin aboard: Sweden and France have taken a combination of approaches where they have put heavy taxes on ICEs and offered incentives to purchase EVs through feebate systems. City planners can help cities identify zones and areas where use of EVs isto be especiallyencouraged. For example, in some parts of China license plate restrictions allow only certain vehicles to be on the roadon certain dates. Note this is an alternative to Delhi’s odd-even scheme restrictions on vehicular traffic / transport to immediately reduce air pollution therein, having been implemented as a drastic solution, alreadybeing in vogue at present.

Planners in European cities have created emissions zones in cities to restrict or charge fees on ICEs vehicles. Norway has created additional benefits for increasing demand for EVs via allowing them access to bus lanes, fee waivers on toll roads, free access to parking. Though in India’s case financial instruments have been the primary mode for demand side incentives, cities are yet to encourage their citizens to shift towards EVs. The transition to EV at local or city level also has several challenges such as coordination between departments, synchronization of action, spatial planning and financial constraints. It is crucial to note that Indian cities had already resorted to EV transition for their public bus fleets we seen in Kolkata city life/transport(also providing the air-conditioning environment at the same time) with support of the state and FAME II scheme. The process of transition is slower than expected since there are both governance and financial constraints at local levels. The quality of cities roads will also play a critical role, as the roads will need to be upgraded due to EVs being heavier than ICE vehicles largely due to the battery. Under ordinary circumstances most Indian cities have poor quality road conditions and they are mostly likely to get worse during monsoon. Research suggests that having better and good quality roads in fact reduces GHG emissions as well as improves EV travel range.

  1. Supply/Source/ImplementationSnags:

To provide support to supply side Government can introduce Regulations where automakers are required to produce and sell EVs in a given region. For example, the California Zero Emission Vehicle (ZEV) mandate in USA, has been followed by other nine US states, long back. China has introduced a similar mandate through its new energy vehicle policy. Several nations globally have considered or begun implementing bans on ICE vehicles sales and mandated to shift to 100% EVs. Policymakers can provide research and development grants to help improve and spur the development of local EV supply chains.In 2019, the Union cabinet approved a phased manufacturing programme through its Mission on Transformative Mobility and Battery Storage, in this program it aims to support establishment of large scale, export quality battery and cell-manufacturing giga-factories in India with a total of 50-gigawatt hours capacity. This is created to incentivize local production of batteries and their components. Several state policies including Gujarat, Andhra Pradesh, Karnataka and Maharashtra are equating the central government’s capital subsidies in order to establish these large-scale units.Also, these states are willing to support the infrastructural needs in form of subsidies on land, capital and other utilities. Also, the government has put regulations in place for dis-incentivizing high-scale imports. For example, the central government’s incentives for large/giga factories are related to their level of indigenization. If they achieve 60% indigenization by 2025, they are eligible for central government subsidies.

  1. Challenges for local manufacturing:

India’s phased manufacturing plans are likely to face challenges, from the absence of adequate reserves of key raw materials like lithium and cobalt. India has to depend on other countries for its supply. The development of the battery industry, charging infrastructure and local supply chains are critical for EV adoption.The Indian Space Research Organization (ISRO) has transferred its in-house lithium-ion technology at a nominal fee of INR1 crore to 10 Indian industries for commercial production. This move is expected to lead to the establishment of lithium-ion cell production facilities for indigenous EVs.

Leading global players have shown interest in establishing cell or battery pack manufacturing facilities in India. The major Indian conglomerates also have outlined plans to set up such facilities. Meanwhile, the government is assessing plans to incentivize domestic battery manufacturing. In January 2020, NITI Aayog sought cabinet approval for a proposal to provide subsidies to investors setting up giga-scale manufacturing units for lithium-ion batteries for EVs.

The government think-tank, in a recent proposal that is likely to be reviewed by the PM’s cabinet in the coming months, has recommended incentives of USD 4.6 billion by 2030 for companies manufacturing advanced batteries.The proposal is to provide cash and infrastructure incentives of USD122 million in FY22, which may be ratcheted up annually.

India, with strong capabilities in certain EV components, other than batteries, can emerge as a hub for manufacturing and exports. These include wiring harnesses, permanent magnets, BLDC motors, AC induction motors, thermal and cooling management systems, electronics (other than semiconductors), plastics, etc. Auto component players in India are increasingly seeking to develop the requisite technological capabilities and capacities in these areas.

  1. Factors to fast-track electrification in India:

Directionally several factors, including the availability of charging infrastructure, robust financing ecosystem, reduced battery prices and increased customer awareness, will pave the way for the new era of EV adoption. Innovative business models such as battery swapping have emerged to enable widespread EV adoption. The battery swapping model alleviates issues of long charging time, range anxiety, high upfront cost and battery reliability concerns for the EV owners. To make this model workable, the operator needs to ensure standardization of batteries and operate in a closed-loop environment.

Recently, various tie-ups/partnerships have been entered between OEMs/Operators and leading oil marketing companies (OMCs) for battery swapping solutions like the one between Kinetic Green and BPCL.To drive EV adoption, original equipment manufacturers (OEMs) and the central and state and governments need to work together for an integrated policy creating a conducive ecosystem for India’s electric mobility vision.

A combination of enabling policy measures, infrastructure development, total cost of ownership (TCO) parity, and a market buzz-promise to fast-track the shift to electric, are needed for the dawn of a new era for the automotive industry. Only a few state EV policies provide guidelines and incentives on battery recycling. A coherent recycling policy is also the need of the hour.

  1. Public charging infrastructure:

Across the world, electricity distribution companies and oil and gas players are developing solutions and entering into partnerships in the EV charging infrastructure space. While private chargers form a major share in the availability of charging infrastructure, public fast charging is also picking up.

In order to enable faster adoption of EVs, the government has issued guidelines and standards for public charging infrastructure wherein it has phased out plans for the roll-out of public charging infrastructure. Based on the proposals received, the union government has sanctioned 2,636 (public) charging stations in 62 cities across 24 states/UTs to be installed by 19 public entities.

Out of these, 1,633 are expected to be fast charging and 1,003 slow charging stations. With this, around 20,000 charging points are expected to be installed across selected cities.

  1. immediate Future Requirement TO ACHIEVE 2030 TARGET:

Even when the state and central government have certain policies in place, it is unlikely that India will reach its aspiration goal of 30% market share of EVs by 2030. This is mostly because of three things in particular –

1) Government policies need more inclusiveness of the both demand and supply chains not just dependent on demand-side policies;

2) the high upfront cost/price of EVs, and,

3) the lack of charging infrastructure both in private and public domains.

Both state and centerneed to work on strategies to make EVs a mandatory form of transportation mode since it is a great enabler to achieve the 2030 target. Additionally with the mandate a fee bate policy could be introduced to increase the demand. Consisting increasingcost & other constraints faced on fossil fuels used in vehicles/ transportation means the Government should immediately introduce a phase wise or complete ban on ICE sales in the ultimate. Additionally scrappage policy for ICE vehicles needs to be integrated with properly mandated EV policies in order to encourage people to scrap their old ICE vehicles and create incentives for them to buy EVs instead. If India meets the goals, it can create a medium-to high impact social gains. For example, the improvement of air quality in the cities, reduction of fossil fuel usage, and reduction in GHG emissions – are the dire needs of the current era.


There is uniformity in the entire process of insurance and stipulated coverages available in Motor Department of General Insurance parlance irrespective of type of vehicles. Obviously Electric car insurance always will be abiding by these. Electric car insurance is a type of motor insurance that is there to protect electric cars from a number of potential damages and losses, such as those that might happen in the case of accidents, natural calamities, or fire/nine other perils as basic cover as stipulated in motor insurances coverages.Electric cars are becoming the dire need as discussed above in details, as they are cost-effective and better for the environment. And in the same way that regular cars need petrol or diesel as fuel, these cars are charged with electricity like your phone or laptop. Since electric cars are not yet very common in India, getting an insurance policy for your electric car can be a little bit different.

The minimum requirement by law is to provide insurance in respect of legal liability to pay damages arising out of injury caused to any person, unlimited in amount, and several countries’ laws also provide for damage to property of other people subject to certain limits and exception. Broadly, there are three types of motor policies:

  1. a) An `Act only’ policy covers the minimum required by the law.
  2. b) The `third party only’ policies which cover the insured’ s liability in respect of third-party injury, death or prop­erty damage.
  3. c) A `third party fire and theft’ policy would additionally cover damage to the car and its contents from fire or theft.
  4. d) The `comprehensive’ policy, which provides the widest and more common form of covers also, includes acci­dental damage to the vehicle in addition to the third party, fire and theft cover.

Such policies may also include personal accident benefits for insured and spouse, medical expenses and loss of or damage to rugs, clothing and personal effects.

There may similarly in ICEs’ & EVs’ availability in Motor Insurance – some add-on covers like, In-voice value protection, protection from inflation,Zero Depreciation Cover, Engine Protection Cover, No Claim Bonus Protection Cover, Roadside Assistance Cover, Daily Allowance Cover, Passenger Cover, Consumables Cover, etc., in the self of your insurer for you to avail on payment of extra premium.

Motor policies are described by the type of vehicle to insured. Thus, there are separate policies for private cars, motor cycles, commercial vehicles, taxis, lorries, vans, hire cars and so on and the rules are exclusive to the type of vehicle. So, all such considerations shall be specifically applicable in due course while arriving on the premium rates for the specific one.

You can’t predict what might happen to your precious electric cars. These kinds of cars have a lot of complex technical and mechanical parts, that help it run smoothly, but can also give you trouble at any time.So, having electric car insurance can be a great help and offer financial protection in an unfortunate event like accidental damage, fire, natural calamities, or theft, and can ensure that you drive your car without any worries. You must also keep in mind that having at least third-party car insurance is mandatory in India to ply your vehicle on road.

As per the Motor Vehicles Act of 1988, all vehicles in India must be insured with a motor insurance policy; electric cars are not exempted from this rule. It means that you have to compulsorily buy car insurance for your electric vehicle to drive it on Indian roads. However, electric car insurance policies aren’t the same as regular car insurance plans.Since electric cars are battery-powered and consist of a different engine, coverage offered by an electric car insurance policy is more customized. Also, the cost of car insurance for electric cars is higher as compared to the usual petrol and diesel cars. So, premiums for electric car insurance policies are higher than conventional car insurance plans. Below are the reasons behind the high costs associated with electric car insurance:

1.Electric cars are expensive to buy –

Electric cars are expensive to purchase compared to regular cars, and even the cheapest electric cars in India cost more than Rs. 10 lakhs. Due to the high value of electric cars, their Insured Declared Value (IDV) increases, resulting in increased car insurance premiums.

Although the up-front cost of buying an electric car is higher, it makes sense to invest in it as it will enable you to save on fuel costs and maintenance charges over the years.

  1. Electric car parts are expensive –

The primary reason for electric cars being expensive is that their various components are costly. The most expensive of them is the car’s battery, which accounts for more than 60% of its value. Replacing or repairing these parts can be a costly affair, which is one of the reasons behind the high pricing of electric car insurance.Car manufacturers are striving hard to reduce the cost of these parts. If they can reduce the costs of electric car parts, their insurance premium may also decline.

3.Batteries have to be replaced –

Electric cars draw their power from high-capacity batteries, and these batteries come with an expiry date, which means that they have to be replaced after a certain period. As mentioned, these batteries are very costly, and replacing them may run into a few lakhs of rupees. Since comprehensive electric car insurance policies cover these costs, their premiums are on the higher side.However, if you want to reduce your electric car insurance cost, you can opt out of the battery replacement cover. But remember that you will run the risk of paying from your pocket in case your battery requires replacement in the future.

  1. High labour costs –

Electric cars require a high level of maintenance because of their costly and complex parts. Not all mechanics can service or repair an electric vehicle; it requires specific knowledge and skills. Currently, the number of mechanics skilled in repairing electric cars is lower in India than the traditional car mechanics.

All these factors result in high labour costs for the replacement or repair of electric car parts, and this is another reason why electric car insurance plans are expensive.

  1. Supply chain and infrastructure-related problems –

Not too many people currently own electric cars in India, due to which there are several supply-chain and infrastructure-related problems. Companies are constrained in terms of getting raw materials required for the manufacturing of EVs. These factors contribute to the high pricing of electric cars, and subsequently, their insurance plans also become expensive.

However, as more people start buying electric cars in India, EV manufacturers will invest in improving their infrastructure and supply chain. Hence, the cost of car insurance for electric cars is expected to decline in the future.

  1. Electric Car Insurance Premium Calculator (As per Go Digit’s Digit Car Policy calls for):

Let us take the simple example of Electric Car’s Mandatory ACT ONLY (Third Party Liability Motor Insurance Policy) Premium.

Car insurance premiums for private electric cars are based on many factors, like kilowatt capacity, make, model, and age.

Vehicle kilowatt capacity (KW) Premium rate for one-year third-party policy Premium*rate for long-term policy
Not exceeding 30 KW ₹1,780 ₹5,543
Exceeding 30KW but not exceeding 65KW ₹2,904 ₹9,044
Exceeding 65KW ₹6,712 ₹20,907

*Long term policy may be issued by the insurers’ means covering one single policy for 3-years policy period for new private cars.

Similarly, a single long-term policy having at a stretch 5-years’policy period available for new two-wheelers.

The premium numbers/ quantum mentioned here are indicative, not exclusive, i.e.,the Own Damage (O. D.) Premium may vary as per the size, cubic capacity, seating capacity and type of thevehicle;So, please visit the various WEBSITES of the Indian Insurerslike PSUs, ACKO General Insurance Limited (the most successful on-line insurer on the very first year of operation), ICICI LOMBARD (the Private Sector giant), Bajaj Allianz (pioneer in Auto Insurance),TATA AIG, GO DIGIT, etc.,or for product information/promotion sites like, Beema Bazar, Policy Bazarto name a few.


Electric Vehicles (EVs) are on course to fulfil their promise as game-changers for the automobile industry. Two-wheeler (2W) and three-wheeler (3W) segments are likely to lead the adoption curve, followed by e-buses and passenger taxis. Directionally several factors, including the availability of charging infrastructure, robust financing ecosystem, reduced battery prices and increased customer awareness, are paving the way for a new era of EV adoption. The government is also pushing the EV policy to address some of the adoption barriers. EV is, thus, are emerging as a disruptive force, with several players experimenting with and discovering innovative business models and use cases.

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