Aiming to go net zero emission by 2070, the government has stepped up the focus on expanding the electric vehicle (EV) ecosystem and charging infrastructure in the country during the Budget 2024 announcements.
The push for greater adoption of electric vehicle will benefit general insurance companies offering insurance covers for electric vehicles, whose penetration target has been set at 30-35 percent by financial year 2030 by Niti Aayog.
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“This will aid in driving EV volumes in the country and will have an ancillary effect on the adoption of EV insurance in the country. The insurance industry is already well-prepared to meet this rising demand through the launch of EV-specific motor insurance coverage, providing adequate protection to the specific risks associated with EVs compared to Internal Combustion Engine (ICE) vehicles,” says Parimal Heda, chief investment officer at Digit General Insurance.
In the wake of several EV vehicles catching fire during charging, there have been at least seven add-on covers being launched by insurers in the country.
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While the overall insurance for EVs is similar to Internal Combustion Engine (ICE) vehicles, a major difference is that third-party insurance (damage caused to opposite vehicle) premium is lower for EV due to low-speed and accident impact. However, own damage insurance portion – which factors damage to the insured’s vehicle per se, is high as batteries comprise 45-65 percent of the overall EV cost.
Magma HDI launched an add-on that covers costs involved in battery replacement and repair for electric and hybrid electric vehicles. Expenses incurred on damage due to unexpected power surge while charging or damage due to water ingression and short circuit too are covered.
Another add-on by Zuno General Insurance insures damage due to fire, short circuit during charging or even when parked at charging station. Insurance is offered against damage or theft of battery, its parts and even charging connectors, adapters and cables under the insurance cover by Bajaj Allianz General Insurance.
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Digit Insurance’s add-on cover offers protection for electrical panel for vehicle charging point, which comprises 8-15 percent of vehicle cost. The damage to the panel can be during charging or can be scratched during an animal attack.
Charger and cable too are costly and cause losses worth tens of thousands of rupees, hence many add-ons launched last month cover the risk of charger (mounted or portable) as well as charging cable being damaged.
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