Twenty-one new electric car models are going to be rolled out in 2021. In 2020, 3,400 electric cars and 1.52 lakh electric two-wheelers were sold in India, as per data from the Society of Indian Automobile Manufacturers. With the Government announcing a vehicle scrappage policy and kickstarting electric vehicle manufacturing, their numbers could increase over the coming years. Rising fuel prices and environment protection measures have been pushing some customers towards electric vehicles.
Yet, no specially-designed insurance policies are available for electric vehicles as they constitute a small part of the total traffic pie currently. “The percentage of such vehicles is less than 1 percent as of now,” says Aditya Sharma, Head, Motor Business, Bajaj Allianz General Insurance.
But unlike insurance costs in the US (21 percent higher) and UK (14 percent higher), India offers a 15 percent discount on premiums for third-party insurance cover on electric vehicles. This policy essentially covers the costs involved in damage and injuries caused to other vehicles and individuals. The discount has been mandated by the Insurance Regulatory and Development Authority of India (IRDA) since June 2019. The own-damage cover for electric car insurance has been generally higher so far in India. “Own-damage premium is similar for both electric vehicles and other fuel. Third party premium for an electric vehicle is lower by 15 percent as compared to other fuel types,” says Adarsh Agarwal, Appointed Actuary at Digit Insurance.