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Motor Insurance For Electric Vehicles

IndianMoney.com Research Team | Posted On Monday, June 10,2019, 04:01 PM

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Motor Insurance For Electric Vehicles

 

 

The Government is giving a big boost to electric vehicles in India. Your next cab ride may be in an electric car. Ola and Uber may soon offer electric cars as they plan to convert 40% of the car fleet to electric vehicles by April 2026.

New Delhi is pushing for the adoption of electric cars as it tries to bring down the oil import bill and curb air pollution in the city.

Take the case of Bengaluru. A lot of citizens plan to commute by bicycle to save fuel and protect the environment.  A lot of bicycle aggregators are promoting the use of bicycles in the city. Sadly, commuting to work by a bicycle in Bengaluru is dangerous as motorists drive recklessly. This is where electric scooters have a big role to play. Take a look at Fae Bikes a startup in Bengaluru. You can pick, ride and drop off the electric scooter anywhere.

The Government is pushing for the use of electric scooters, commercially. Soon ecommerce Companies would have to use electric scooters for food delivery as they would have to go electric by April 2023. Food delivery apps like Swiggy and Zomato are booming in India.

Now to the big question. What about motor insurance for electric vehicles in India? Want to know more on Car Insurance? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

Motor Insurance For Electric Vehicles

What is Third Party Motor Insurance Liability?

Third party motor insurance is compulsory in India. The insurer is the first party and the insured is the second party. The third party is any unrelated party who makes a claim against you for death (say death in a collision in which your car was involved), injury or damage to his/her property. Third party insurance is where the insurer agrees to indemnify you (the insured party) on being sued (this is being held legally liable) for damages/injuries to a third party. Third party motor insurance doesn’t cover damages to your own vehicle. (Own vehicle damage).

Electric vehicles have lower third party premiums compared to petrol and diesel run cars. Auto sales have dipped in recent times, as insurance premiums are on the rise. This is a great chance for electric cars as lower third party premiums could boost the sale of these vehicles.

See Also: Types of Auto Insurance

Cheaper Motor Insurance for Electric Vehicles

The premium rates for electric vehicles are around 15% lower than regular vehicles. This is for both third party liability and own-damage motor cover. Insurers look into past claims, type of vehicles used and engine-capacity of the vehicle, before fixing motor insurance premiums.

Currently, insurance penetration is low for electric vehicles in India. According to a Niti Aayog report, there could be sales penetration of 30% in electric vehicles in private cars and 80% in two/three-wheelers by the year 2030. This would promote cheaper electric vehicles and also allied costs would reduce. Currently the electric vehicle segment in India suffers from poor infrastructure. (Improvements are needed in electric storage which means better and cheaper batteries and EV charging facilities).

See Also: Importance of Car Insurance

Electric Vehicles Save Fuel and Protect the Environment

As more and more people buy electric vehicles, the penetration rises in India. This not only saves costly fuel (We import a lot of crude oil and international prices are on the rise), but also protects the environment. This is clean fuel and going green.

The Supreme Court had made it compulsory for all new cars and bikes to have three-year and five-year third party insurance cover. This led to a jump in insurance premiums (rise by 1.5-2.3X) which has impacted the auto sector in India. Liquidity crunch and high motor insurance premiums led to vehicle sales crashing 17% in April to an eight-year low.

See Also: Zero Depreciation Car Insurance

Premium for Electric Vehicles and Regular Vehicles:

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