Automobile Desk – EV Auto Insurance vs Petrol-Diesel Cars: The cool and gleaming electric cars running on the roads are attracting everyone's attention. People are now increasingly turning to EVs due to their low running costs and environmental friendliness. However, when it comes to buying a new car, most people only focus on the ex-showroom price and charging maths. One big expense associated with car ownership is often overlooked, and that is the vehicle insurance that needs to be paid every year.
It is very important for first-time EV buyers to know that the insurance premium for electric vehicles is much higher than conventional petrol and diesel cars. The rates of third-party insurance are decided by the government, so there is not much difference there. The real difference comes when you choose own-damage or comprehensive cover for your car.
There are several solid reasons behind the expensive premium of electric vehicles:
- Higher on-road price and higher IDV
Due to the advanced technology, complex circuitry and expensive batteries used in electric vehicles, their starting price is much higher than petrol-diesel variants. The mathematics of insurance is simple; Higher the value of the vehicle i.e. Insured Declared Value (IDV), its annual premium will also be decided accordingly. - Half the price of a car: battery pack
The heart of any EV is its lithium-ion battery. It is one of the most delicate and expensive parts of the car, which can cost 50 to 60 percent of the total cost of the vehicle. If the battery gets completely damaged in an accident or in a situation like waterlogging, then replacing it puts a burden of lakhs on the pocket. To cover this big risk, insurance companies charge extra on EVs. - Expensive repairs and availability of spare parts
The mechanism of traditional vehicles is quite simple and their parts are also easily available in the market. In contrast, the high-voltage components and sensors used in EVs are quite expensive. Instead of selling small components separately, car companies replace the entire assembly set. Due to the huge repair bill after an accident, the claim expenses of the insurance companies also increase. - Lack of experts and special service centers
Mechanics who repair petrol and diesel vehicles are found in every street, but repairing EVs requires specially trained technicians and advanced tools. At present, certified EV service centers are limited in the country. Because of this, both the time taken and labor cost of repairing are much higher as compared to petrol cars.
However, according to auto experts, this situation will not always remain like this. In the coming days, when batteries and parts will be produced on a large scale within the country, the cost of repairing will reduce. With the increasing number of EVs on the roads, insurance companies will also get better risk assessment data, which is expected to balance the premium rates in the future.