Why is Insurance for Electric Vehicles More Expensive?

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Fascinated about electric vehicles? Are you planning to buy one? Read on to know about the reasons why electric vehicle insurance is more expensive than the insurance for regular cars.

Being economical and viable, electric cars are gaining popularity among people these days. The constant increase in demand of the electric vehicles makes it evident that people are becoming all the more environment conscious and shifting to electric vehicles.

Are you planning to get an electric car for yourself soon? If so, there are a few things that you must know before making the purchase. It is well known that electric cars are cost-effective and feasible car options for a family. But do you know that these cars come with an expensive insurance policy as compared to cars running on petrol or diesel?  So, what is the reason of electric cars insurance being more costly than their gasoline driven counterparts. Of course, the features of electric cars such as, zero emissions, less pollution, etc are some of the reasons for the expensive insurance policies of the electric cars.

In this blog, we will discuss the reasons for the high cost of electric car insurance policy in details. We will also discuss tips to lower premium rates of electric car insurance. So, read on to know all about electric vehicle insurance premiums in India.

Why Insurance plans for Electric Vehicles are more Expensive?

Electric vehicles offer the best and the most advanced cutting-edge technology, which is why they are so highly priced. And that is the reason why the insurance plans for electric vehicles are more costly. Though, the initial cost of procuring an electric vehicle is more but you get monetary benefits over time.

Here are the key points which makes EV car insurance in India so expensive:

  • Electric cars are expensive – since the electric vehicles are expensive, so the cost incurred by insurance companies in the repairs of such vehicles is also more. So, if the electric car collides or gets involved in an accident, the insurance provider will have to incur huge amount in the repair of the car. It is thus evident for the insurance plans for such cars to be expensive as compared to non-electric cars. And that is why you require to pay high premium rate for electric vehicles as compared to ordinary gasoline driven cars.
  • Costly Repairs – the maintenance and repair of electric cars are more costly as compared to regular fuel driven cars. This is because the parts of electric cars are very expensive and that is another fair reason for high electric car insurance costs and the high rate of premium charged for such cars. Moreover, electric car repair need specialists to get the repairs done as they can’t be done in the ordinary mechanic shops.
  • Dearth of technicians – the availability of spare parts of an electric vehicle is restricted and at the same time the technicians who deal with repairing electric cars are also limited. Thus, the availability of limited experts specializing in repair of electric vehicles makes the insurance plans of these cars so expensive.

Besides the above, there are other reasons for the high cost of electric car insurance policies like the road conditions and the traffic conditions in the country which also affect the insurance premium of electric cars.

How to Cut the insurance costs of Electric Vehicle 

To cut costs of insurance for electric cars you can research well about the different insurance companies offering electric vehicle insurance rates and look for the appropriate discounts being offered by such insurance companies. To compare rates, you can even take the help of websites of insurance aggregators so that you can pick the plan available with comprehensive protection at reasonable price.

In some plans, you may benefit by paying the EV insurance premiums at one go to save money rather than paying in installments. Further, by installing devices like telemetry and dashboard cameras in your electric car, you can aid is safe driving techniques and thereby influence the insurance companies to lower the premium prices.

The use of Telemetry can also enhance driving patterns in a car. It can help the driver to control speed of the car, the acceleration and brake etc. These devices make sure the car is well driven and lowers the risk of accidents. Thus, by using these devices you can augment the safe driving skills and negotiate with insurer about lowering premiums.

Furthermore, it is predicted by industry experts that premium for electric car insurance will come down soon as car manufacturers are working towards minimizing manufacturing costs of the electric cars. Moreover, since the number of specialist technicians are also increasing day by day to a great extent, it will help in lowering the electric car premiums soon.

To conclude 

It is true that electric vehicles are gaining more and more prominence lately. Being economical, people are getting influenced by these electric cars to gain long term benefits. Thus, large number of people are seen purchasing the electric cars in the country lately. Though electric vehicle insurance policy rates are high and you need to pay more premium for electric cars than the regular gasoline cars, however the demand for such cars are still gaining momentum in the market at present.

In India, many car manufacturers have started developing electric vehicles due to their popularity. The best thing about these cars is that they are environment friendly and safe for both humans and nature.  And it is most likely that with the rising demand of hybrid cars, the rate of such cars will soon come down. When the rate of such cars will be less, the electric vehicle insurance will also see significant reduction in the premium rates.

Also Read: Electric Bike Insurance in India

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Gayatri Prabhu, Head-Digital Business at Mahindra Insurance Brokers Limited (MIBL) is one those few digital leaders who has the width and depth that is required to execute an ROI driven holistic digital strategy. She cuts through the noise, identifies the critical levers and leads her team to successful execution of the defined strategy. Her core mantra to win new and retain existing customers is: understand the consumer behavior and craft experiences around it.

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