India’s auto industry is undergoing a fundamental transformation, with electric vehicles (EVs) gradually getting popular. While still in a nascent stage, the EV market size is expected to grow at a CAGR of 43.13% between 2019 and 2030, as indicated by a recent Research and Markets report.

The motor insurance sector is also evolving with more people warming up to EVs and is providing vehicle owners with protection through suitable policies. EVs are exposed to risks on the road like conventional vehicles and thus it’s important to adequately insure them. But do EVs need a different motor insurance policy compared to conventional vehicles?

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Understanding the coverage for EVs

EVs operate on batteries powered by one or more electric motor(s), instead of the internal combustion engine. While EVs might be hybrid or they could be fully electric, their insurance is similar to the regular motor insurance policy. Third-party cover is a lawful mandate for EVs as well. Keeping in view the advanced technology and high maintenance, EV insurance costs more than the regular policy. However, considering this factor, the IRDAI had also mandated a 15% discount on third-party insurance cover for EVs to make it more affordable.

Coming to the protection of your vehicle, it is always recommended to buy a comprehensive policy, which shields your vehicle even in the event of total loss. Apart from this, the cost of EV spare parts and their replacement or repair can also be exorbitant. Since no one can really predict the extent of damage that one can suffer, it’s always advisable to go the extra mile in ensuring maximum protection.

Choosing suitable add-ons for EVs

While a comprehensive policy is a stepping stone to safety, the drill doesn’t quite stop here. When you drive a piece of machinery as sophisticated as an EV, it is important to add extra layers of protection to your insurance by choosing the right add-ons. Some of these are:

—Zero depreciation cover: Depreciation of your vehicle begins the moment you purchase it and it continues through the years as you drive. Your insurance would not account for the depreciated value at the time of claims and only pay the claim amount after deducting the depreciation cost. Adding zero depreciation or bumper-to-bumper cover will help you save this cost at the time of claim settlement and also include the depreciated cost.

—Return to invoice cover: This is another rider that will help you get a higher amount during claims. As the name suggests, this cover helps you get the original price or the invoice price of your vehicle in case you suffer total loss. Normally, the policyholder only receives the market value of the vehicle, which is less than the price paid for it. This add-on keeps you covered from the risk of total loss of the vehicle.

—Roadside assistance cover: It is super useful in cases where you might need assistance owing to a vehicle breakdown in the middle of the road. Since EVs are a fairly new concept, every roadside mechanic might not be of much help in such situations. It’s best to leave your vehicle only in assured hands and this rider makes sure you get expert assistance on the spot.

—NCB cover: Often termed the easiest and safest way to save on motor insurance premiums, NCB or no-claims bonus is the reward you get for good driving. This is assessed on the basis of claims made—if you make no claims, your bonus remains intact and you stand to get up to a 40-50% discount for consecutive five claim-free policy years. It’s a beneficial add-on especially if you are a seasoned and safe driver.

The author is head, Motor Insurance Renewals, Policybazaar.com

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