As the market for electric vehicles expands, more people are purchasing EVs. It is crucial that your electric vehicle be insured, just like any other type of vehicle; nevertheless, you must keep in mind that the insurance coverage offered for nonelectric automobiles is different from that for electric vehicles.
The argument is that electric vehicles are expensive cost wise and might be more prone to damage, so repairing them will cost more money when compared to regular vehicles. As a result, insurance plans offered by insurance companies for each of the vehicles differ. The following are some examples of what causes differences in insurance costs.
Costs of premium
According to Venkatesh Naidu, the high cost of repairs and replacements of batteries for electric vehicles raises the insurance premiums for a comprehensive cover policy, compared to diesel- and gasoline-powered models. But then, customers can still opt for a third-party policy at competitive rates since it attracts a discount of 15% on third-party premiums. Nonetheless it is important to note that the price of the vehicle and the location where the policy is purchased will also have an impact on the premium charged on the vehicle.
According to Ashwini Dubey, electric vehicles are still new to the market, and there haven’t been as many claims filed against them as there have been against ICE vehicles, which have replacement and spare parts readily available. As a result, insurers tend to set high prices on EVs, whose aftermarket is low.
Type of coverage
Naidu, while speaking to CNBC-TV18.com, said that the scope of coverage for EVs includes liabilities emanating from fire, theft and natural disasters, plus third-party injuries. He further explained that modern insurers tend to offer insurance packages for new vehicles in order to cover all these liabilities, but this coverage often comes at a higher price.
Cost of insurance
According to Dubey, when it comes to the insurance of an electric scooter and an ICE two-wheeler, the cost is almost identical. On the other hand, an electric four-wheeled vehicle is slightly more expensive than a conventional one. This difference is all because of the fact that electric mobiles are powered by modern, capable and expensive batteries.
How to save on EV Insurance costs
Dubey advises choosing third-party insurance and taking advantage of any premium discount, or better yet, choosing the appropriate approach when picking a policy. For example, if you only travel short distances, you might want to select a pay-as-you-go plan. Additionally, one can compare insurance quotes from several companies to find the best deal while making sure the insurer promotes ecologically friendly drivers.
As EV and battery technologies from industry actors such as Kandi Technologies Group Inc. (NASDAQ: KNDI) matures, prices could reduce and insurance costs would also lower.
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