The rising fuel prices and increase in the population have made electric cars more popular among folks. People choose electric vehicles because of their cost-effective charging feature and longer distance coverage. Despite the affordability of electric cars, the insurance for these vehicles is still more expensive when compared to their counterparts. Let’s know why?
Why is Electric Car Insurance Expensive?
Electric cars are made using advanced technology and loaded with power inverters and thermal system charge ports, making their repair cost expensive. Furthermore, EVs are lightweight and may suffer from heavy damage. This is why insurance for EVs is high irrespective of their cost-effective run time and environment-friendly nature.
What are the reasons for the high premium rates of EVs?
There are multiple reasons why the premium rates on insurance are high for EVs. A few of them are:
• Electric Vehicles Are Expensive: The car manufacturers aimed to reduce the financial burden of fuel and end the pollution by running these vehicles on batteries. These are powerful batteries that are made of advanced technology and are prone to damage. This increases the insured declared value of the vehicle, thereby raising the premium.
• Replacement Cost of Car Batteries: The batteries used in the cars have a shelf life and need replacement before it completely stops working. These batteries are made of lithium-ion, which makes replacement costly and makes the premium rates go up.
In case the battery has a longer shelf life and does not need a replacement that often, in such cases, the premium rates can decrease for third party insurance.
• High Maintenance: Electric cars are made up of complex and expensive parts, and repairing or replacing the damaged parts requires high skill service, which makes the cost of maintaining the electric vehicles high. Moreover, the number of electric vehicles and service stations is far lower compared to the traditional cars, thus increasing the charges for e-mechanic. Higher service charges lead to higher insurance premium rates.
Now that you know about the reasons for the high-interest rates of the premium, you would need to inform the insurer regarding the following information before purchasing your insurance for an e-car.
• IDV: The insurance for e-cars are same as that of traditional fuel cars. And like all car insurance, the cost of insurance is dependent on IDV.
• Model of the EV: The IDV of the car is dependent on the approximate market value of the car. Thus, sharing the model number of your car with the insurer is vital.
• Year of Registration: The insurer can calculate the depreciation value of the car basis the registration date of the car.
• Location: You need to mention the location where the car will be driven to understand whether the location is more prone to accidents or less.
With a few tips, you can assure that the premium of the insurance is kept lower such as:
• Buy the policy online: You can purchase the car insurance policy online, decreasing overall operational costs. Furthermore, you can calculate the insurance premium online with the help of a car insurance calculator. At Kotak General Insurance, you can also call our experts online on the toll-free number to seek guidance on the policy.
• Avoid raising small claims: If you can skip raising small claims, you can enjoy the benefit of a No Claim Bonus (NCB) on policy renewal. NCB is a discount the insurer gives on your premium rates for not raising any claim during the policy tenure.
• Install Anti-theft gadgets: Installing anti-theft device reduces your vehicle's risk factor, thereby reducing your premium rates.
• Renew before policy lapses: Buying the policy before the renewal helps retain the NCB ( No claim Bonus), which acts as a discount to your premium rates.
The popularity of electric cars is increasing day by day, and with the high maintenance cost of these cars, it is advisable to opt for a comprehensive car insurance policy that provides coverage for both own damage and third party insurance. Kotak General Insurance offers Kotak Car Secure, a comprehensive car insurance policy that offers complete protection for your car.
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Disclaimer: The content provided is for education and informational purpose only, none of the information contained in our blog amounts to any form of opinion or advice. Please go through policy related documents carefully or consult an expert before making any insurance-related decisions.