When the Electric Vehicle (EV) was first introduced, it was as early as 1993. The car was manufactured by Eddy Electric and was called, “Love Bird”. Unfortunately, people were quite sceptical about the concept and due to low sales, they stopped manufacturing this car in India. After a couple of decades only now, electric cars have slowly gained popularity, and many are considering buying or switching to EVs. These cars primarily serve the purpose of being an eco-friendly alternative to traditional fuel cars such as petrol, diesel or CNG cars. All cars require insurance but, does the type of car impact the car insurance? Read further to understand this in detail.
Is Car Insurance for Electric Cars and Traditional Cars the Same?
The answer to this is quite simple, no. Car insurance for an electric car is much more expensive when compared to traditional cars. The price of the car, availability of car parts, the expense of the battery, etc., are some reasons for the relatively higher insurance premium.
Reasons for High Premium Costs in Electric Cars
- Electric Cars are Expensive
One of the basic ways that car insurers calculate the premium cost of cars is by considering the price of the car. The more expensive the car is, the high the premium rate. EVs come with high-capacity batteries, cutting-edge technology, high-quality car parts, etc., which increase the price of the vehicle. This is one of the main reasons that car insurance for EVs is more expensive when compared to petrol/diesel/CNG cars.
- Parts of Electric Cars are Expensive
These cars come with very expensive car parts and the most expensive car part is the lithium-ion battery. The battery alone accounts for more than 50% of the cost of the car. If the cost of these batteries reduces, the insurance premium will also eventually decrease.
- Frequent Replacement of the Battery
The shelf life of batteries is very low, and one might need to replace them frequently. As mentioned earlier, these batteries are very expensive, and replacing them is a liability to the insurance company. Thus, the insurance premium is also high.
- Lack of Experienced Electric Car Mechanics
Electric cars require a high level of maintenance and frequent servicing. It takes an experienced mechanic who knows everything about EVs to provide the best service. The number of qualified and reliable electric car mechanics currently is still low and so they charge a lot to service these cars. The insurance premium is high since the labour cost for specialised mechanics is expensive.
While insurance for traditional cars may currently work out to be cheaper, our environmental responsibility needs to be considered too. It is time that people started making more mindful choices about the life they lead and one of the baby steps to protect our planet is switching to EVs. To promote the use of electric cars, the Insurance Regulatory Development Authority of India has even reduced the third-party insurance rates for these cars at a 15% discount.
Choose the best car insurance policy that suits your needs, from Chola MS Insurance to have a safe, worry free driving experience.