Over the last few years, we have seen significant advancements in the auto industry, especially in the category of Electric Vehicles (EVs). An electric car is a car whose engine is powered by rechargeable batteries instead of fuel- petrol or diesel. The sales and demand for Electric Vehicles (EVs) are slowly picking up in the Indian auto market with a genuine surge in the number of people shifting from conventional cars (petrol and diesel) towards EVs.
With global warming and climate change threatening the environment around us, switching to electric vehicles can be seen as the best decision you can make for yourself and generations to come. EVs are not just an eco-friendly alternative to petrol and diesel vehicles but are also cheaper to run in the long term.
Though the EV market is still growing in India, prospective buyers may have concerns about insuring the electric car. There are only a handful of insurance providers offering vehicle insurance for electric cars. Nevertheless, the idea of providing a safety cover to the policyholder remains similar to the car insurance policy for petrol and diesel vehicles.
EVs are manufactured and equipped with cutting-edge technology such as high-capacity batteries, sophisticated car parts, and more. Therefore, in the event of an accident, your car may suffer heavy damages. High car repairing expenses can put a significant strain on your financial budget, especially in the case of an electric vehicle. Therefore, a comprehensive car insurance policy is needed to take care of the repairs, whether the damage to your car is due to your mistake or someone else's. It also seems the most logical investment any electric car owner can make.
The electric car insurance policy offers financial protection to your car against damages such as accidents, natural calamities, fire, theft of the insured vehicle, and third-party injuries or damages to their property. Choosing the right cover for your electric car helps you avoid out-of-pocket expenses.
Along with all the advantages, it is also compulsory to have at least a third-party liability insurance policy according to the Motor Vehicles (Amendment) act 2019. The Motor Vehicle Act dictates the laws associated with motor vehicles in the country. All vehicles must have valid insurance to drive legally on public roads, which also includes electric cars.
Another reason the electric car/motor insurance market will see a rise in the upcoming FY2022 is because of the various types of compensations provided by the authorities on insurance for electric vehicles. For instance, IRDAI, the insurance regulator, has mandated the incentivisation for electric car owners in order to work towards a goal of a sustainable environment by making the third-party liability insurance for private electric cars in India 15% lower than that of general private cars of similar categories, effective from June 16th, 2019. Similarly, certain state governments have extended tax incentives on the registration of hybrid and electric cars in India.
It is crucial that no matter which car you opt for, be it electric, petrol, or diesel variant, you must make sure that you insure it with an optimum car insurance policy.
This article is authored by Pulak Sarmah, Head of Marketing at Kotak General Insurance, and views expressed in this article are the author’s personal views