The Impact of EVs on Motor Insurance Premiums

Here’s the truth - EV motor insurance does not play by exactly the same rules as your old petrol or diesel friend. From how premiums are calculated to the unique add-ons tailored for electric vehicles, there’s a new playbook you’ll want to get familiar with. With that in mind, let’s deep dive into the world of electric vehicle insurance and how it could impact your wallet.

Why Does Electric Vehicle Insurance Work Differently?

As technology is evolving, we are stepping into a new world of vehicles. Unlike traditional petrol or diesel vehicles that our fathers used to drive, the new generation of EVs runs on lithium-ion batteries and highly specialised tech. While this sounds good and futuristic, it also means that repairing an electric vehicle, replacing parts, or even diagnosing small issues can be more expensive and slower than for your average car or bike.

Now, insurance providers are not blind to this fact. As the government is pushing towards electric vehicles and a more sustainable environment, insurers are paying extra attention to EVs and how the industry is evolving. They are coming up with new EV motor insurance policies every now and then. Your insurance premium will depend on factors like:

• Specialised parts and diagnostic tools
• Battery replacement cost
• The overall market value of the EV
• Driving history
• Usage pattern

To be concise, your insurance is not just based on what you drive – it is based on how “insurable” that specific vehicle is in today’s world and your usage history as a driver.

Is EV Motor Insurance Cheaper or More Expensive?

Here’s where things get a bit tricky. Let’s break it down for you:

1. Higher Repair Costs = Higher Insurance Premiums

Yes, electric vehicles can be pricier, and repairs of these vehicles often require specialised knowledge. A small issue in an EV might mean a series of sensor recalibrations and battery safety checks – things that are not cheap. This usually means a higher rate of premium for you.

2. There are Discounts

Many insurance providers offer discounted rates on EV motor insurance premiums to help you make the shift effortlessly. So, while the base premium may be slightly higher, the final price could be equal to or even lower than what you would pay for a traditional petrol car.

3. Add-ons Are Key

You will want to consider EV-specific add-ons like battery protection, roadside EV charging assistance, and electrical system coverage. These will bump up your premium a bit, but it’s better to have them in times of emergency.

4. Lower Depreciation Rates Help

Electric vehicles tend to hold their value much better than old traditional models. That’s some good news for you and your insurance premiums. The slower your vehicle depreciates, the better your coverage-to-cost ratio gets.

How to Keep Your EV Motor Insurance Premium in Check?

You do not have to accept a sky-high insurance premium just because your car is electric. With a little effort, you can keep your motor insurance premium in check. Here’s how:

1. Choose the Right IDV

Don’t blindly accept the IDV that your insurance provider suggests. Go for a realistic value that balances premium costs and your claim eligibility.

2. Install Anti-Theft Device

EVs are attractive targets, especially the newer models. Installing an ARAI-approved anti-theft system can fetch you a nice little discount on your premium.

3. Opt for a Higher Voluntary Deductible

If you are confident in your driving skills, opting for a higher deductible can reduce your premium rate. Just make sure you can cover that amount in case of emergencies.

4. Clean Driving History

Some insurers offer telematics-based insurance coverage. They track how you drive and reward good driving behaviour with lower premiums. Think of it as karma for careful drivers.

5. Use No-Claim Bonus

Insurance providers reward you with discounts if you don’t file claims on your insurance plan for a year. Use this to your advantage to keep your premiums low.

6. Pay-as-you-drive Insurance

This type of motor insurance plan charges you a premium based on the number of kilometres you have driven your insured vehicle. If you are someone who does not drive that often, this can help you lower your premium to an extent.