Why is the insurance of electric vehicles more expensive than petrol and diesel vehicles?

Electric vehicles in India are cheap or after subsidy you get at a reasonable price, but their insurance is much more expensive than petrol or diesel cars. The cost of car insurance depends on many factors, such as engine capacity, car model and car use, so there is no fixed amount. Third-party insurance can start from Rs 2,000, while the price of a comprehensive policy can be Rs 10,000 to Rs 20,000 or more.

Electric car insurance is determined by your car’s kW (KW) capacity, and its cost can range from Rs 1,780 to Rs 6,712 per year or long period. In some cases, it can range from Rs 5,543 to Rs 20,907. In addition, car makes and models also affect insurance.

The life of any electric vehicle is his battery. Today, the battery of the electric car is about 30 to 40 percent of its total cost. If the battery is damaged in an accident, the cost of replacing it may be in lakhs of rupees. For example, the cost of changing the battery of the electric vehicle can be from 4 to 6 lakh rupees, while the engine repair in the petrol car is not so expensive. This is the reason why insurance companies consider the risk more and charge more premiums.

Electric vehicles in India are still a new technology. Unlike petrol and diesel cars, their spare parts are not easily available everywhere. If an electric car’s fender, control module or battery pack deteriorates, then buying and repairing parts costs more. In addition, dealerships and service centers are limited, which increases the cost of repair. To meet these additional costs, companies increase the premium.

Electric vehicles are often equipped with advanced features such as Adas (Advanced Driver Assistance System), smart connectivity, digital display and automatic braking system. These features make cars modern and safe, but their repair is very expensive. If the sensors get spoiled even in a small accident, the bill can reach thousands or millions.

Over the years, we have heard about the incidents of fire in the battery of electric vehicles. Although companies are continuously working on battery safety, it remains a big risk for insurance providers. Incidents such as battery malfunction or fire may require to change the entire vehicle. Electric vehicles repair special training and equipment require, which are not easily available everywhere. Therefore, as the risk increases, the cost of insurance also increases.