How Are Electric Vehicles Impacting Car Insurance in India?

Electric Vehicles (EVs) are no longer just a futuristic idea — they’re a present-day reality on Indian roads. With growing awareness about sustainability, rising fuel prices, and strong government incentives, more and more Indians are switching to EVs. But as the auto industry transforms, so does the insurance sector.

So, the big question is — how are electric vehicles impacting car insurance in India? Let’s break it down.

Rise of EVs in India: A Quick Glance

India’s electric vehicle market is gaining momentum fast, especially in two-wheeler and passenger car segments. Big players like Tata, MG, Hyundai, and Mahindra have already launched EVs, and the government is offering subsidies and tax benefits to boost adoption.

But with this shift in vehicle type, motor insurance policies are also evolving.

How Is Car Insurance for EVs Different?

1. Premium Calculation Is Different

EV insurance premiums are calculated based on:

• Battery capacity (measured in kilowatts)

• Vehicle type and make

• Manufacturer’s declared value (IDV)

Unlike petrol/diesel cars where cubic capacity is a factor, battery capacity influences EV premiums. Higher capacity = higher premium.

2. Lower Third-Party Premiums

IRDAI (Insurance Regulatory and Development Authority of India) has announced discounted third-party insurance rates for EVs to encourage adoption. So compared to regular vehicles, EV owners currently enjoy lower third-party premiums.

3. Cost of Own-Damage Cover Can Be Higher

EVs come with expensive components, especially the battery. If an EV battery is damaged or needs replacement, the cost can run into lakhs. As a result:

• Own-damage premiums may be slightly higher

• Repairs or claims can be more expensive than fuel-based cars

4. Specialized Add-Ons for EVs

Insurers are now introducing EV-specific add-ons like:

• Battery Protection Cover

• Charging Equipment Cover

• Roadside Assistance (specific to EVs like charging help) These are not commonly needed for petrol/diesel cars.

5. Fewer Insurers, Limited Options (for now)

Since EVs are still a developing segment, not all insurers offer comprehensive EV plans yet. But this is rapidly changing as the market grows.

Are EVs Cheaper to Insure?

Yes and no. Here’s the comparison:

So while third-party insurance is cheaper, own-damage may be higher. But overall, as EV tech becomes mainstream, insurance costs are expected to normalize.

Things EV Owners Should Consider When Buying Insurance

• ✅ Ensure battery and charging station are covered

• ✅ Choose zero-depreciation and roadside assistance add-ons

• ✅ Check for network garages offering EV repairs

• ✅ Compare policies online — not all coverages are equal

The Future of EV Insurance in India

With increasing EV adoption, insurers are already:

• Launching tailor-made EV insurance products

• Partnering with EV manufacturers for bundled plans

• Investing in EV-focused claim processes and repair networks

In the coming years, EV insurance will become more competitive, affordable, and standardized.