Buying EV Insurance? Don’t Skip These 5 Shocking Factors That Could Cost You Big
Buying EV Insurance – Electric vehicles (EVs) are transforming the automotive landscape with their promise of cleaner air, lower running costs, and futuristic technology. But while EV adoption is rising fast in India and around the world, many new owners overlook one critical detail: buying the right electric vehicle insurance.
EV insurance isn’t just a rebranded car policy—it comes with unique risks, hidden costs, and unexpected exclusions that could burn a hole in your pocket if ignored. Whether you’re switching from a petrol car or buying your first Tesla, Tata Nexon EV, or MG ZS EV, this guide will walk you through 5 shocking factors you must know before buying EV insurance in 2025.
Buying EV Insurance
| Feature | Details |
|---|---|
| EV Battery Costs | Battery can account for up to 50% of the car’s value; most expensive part to replace |
| Repair & Labor | Specialized parts and technicians raise repair costs and downtime |
| Claim Frequency | EVs see higher accident claims due to instant torque and new driver behavior |
| Limited Insurers | Fewer insurers provide full coverage, leading to higher premiums |
| Essential Add-ons | Must-have add-ons: Battery protection, zero depreciation, charger cover |
| Telematics Discounts | Safe driving tracked through tech can lower premiums over time |
| Battery Leasing Model | Some EVs offer leased batteries—insurance must reflect this accurately |
| Official Resource | IRDAI Website for insurance regulations and approved providers |
Buying insurance for your electric vehicle isn’t just a formality—it’s a strategic move that protects you from massive future expenses. With EV battery costs running into lakhs, limited garage support, and higher accident claims, choosing the right insurance policy can save you from unexpected shocks.
Don’t just buy the cheapest policy—buy the smartest one. Prioritize insurers who understand EVs, offer the right add-ons, and support you with hassle-free claims.
Whether you’re a first-time EV buyer or switching your plan, stay informed and compare policies using official platforms like IRDAI to make an empowered choice.
Why EV Insurance Is Different?
Let’s start with a basic truth: electric vehicles require different coverage than traditional fuel-powered cars. The primary reasons include:
- High-value batteries
- Specialized components
- Repair shop limitations
- Greater digital complexity
A basic third-party policy will cover liabilities like accidents involving pedestrians or property. But it won’t protect your battery or charging setup, which can cost lakhs to replace.
1. Battery Replacement Cost Can Total Your Car
EV batteries are extremely expensive. In many cases, they represent up to 40–50% of the EV’s total cost. For instance:
- Tata Nexon EV battery: ₹5–6 lakh
- Hyundai Kona EV battery: ₹7+ lakh
- Tesla Model 3 battery: ₹8–10 lakh
If your EV battery is damaged in a flood, short circuit, or accident, insurers may write off the entire car as a total loss. Worse, battery wear-and-tear isn’t usually covered by standard policies.
Pro Tip: Always check for battery coverage add-ons. Some insurers now offer battery protection riders that cover manufacturing defects, water damage, or accidental damage.
2. Repairs Are Costly and Technicians Are Limited
Most garages aren’t equipped to handle EVs. They require:
- High-voltage handling certification
- Specialized tools for diagnostics
- Manufacturer-trained staff
This means longer wait times, higher repair costs, and limited authorized service centers—especially in tier-2 and tier-3 cities.
According to a Bankrate.com study, EV repair costs are 20–40% higher than petrol/diesel vehicles on average.
Pro Tip: Choose an insurer that has a wider EV-approved garage network. Also, check if they offer cashless repair service at manufacturer workshops.
3. EVs Have a Higher Claim Frequency
EV drivers file more claims than ICE (internal combustion engine) drivers. Why?
- Instant torque: EVs accelerate faster, increasing accident risk for new users.
- Silent operation: Pedestrians and cyclists may not hear EVs approaching.
- Advanced electronics: More components can be damaged even in minor collisions.
However, severity of injuries is lower due to better crash safety and ADAS (Advanced Driver Assistance Systems) in most EVs.
A 2024 IIHS report found that EVs are 30% more likely to be in a collision, though injuries are 20% less severe.
Pro Tip: Look for policies with lower deductibles and fast claims processing to offset higher risk.
4. Fewer Insurers = Higher Premiums
EV insurance is still relatively new in India, and not all insurers offer comprehensive coverage. As of 2025, only a few major players like:
- ICICI Lombard
- HDFC Ergo
- Bajaj Allianz
- Digit
- Tata AIG
…provide dedicated EV plans.
Less competition means higher premiums. You may also face challenges like:
- No discounts for telematics or low usage
- Limited options for custom plans
- No-claim bonus (NCB) portability issues
Pro Tip: Use comparison platforms like Policybazaar or Turtlemint to compare multiple EV policies before buying.
5. Must-Have Add-Ons That Most Owners Skip
Your base policy will not cover everything you need as an EV owner. Consider these essential add-ons to avoid unexpected expenses:
a) Battery Protection Cover
Protects against electrical faults, water damage, or accidental battery issues.
b) Zero Depreciation Cover
Get full claim value without deductions for wear and tear—critical for high-value EV parts.
c) Roadside Assistance
EVs can run out of charge unexpectedly. Towing services to the nearest charging point are crucial.
d) Charger and Cable Coverage
Covers damage or theft of your home wall box or portable charging cables.
e) Consumables Cover
Covers nuts, bolts, oils (coolants), which are often excluded by default.
Pro Tip: Add-ons may only cost ₹1,000–2,000 annually but can save lakhs in the long term.
Emerging Trends to Watch in 2025
1. Battery Leasing Models
Some EV manufacturers offer battery leasing (especially in Europe and China). If adopted in India, this would change the insurance structure. Owners may not need to insure the battery—only the vehicle body.
2. Telematics-Based Pricing
More insurers are launching Usage-Based Insurance (UBI) policies using driving behavior data. Safe drivers could earn lower premiums.
3. EV-Specific Insurance Products
Expect custom products covering software issues, firmware upgrades, OTA update errors, etc.
Pro Tip: Ask your insurer if they offer new-gen EV insurance plans with these features.
How to Lower Your EV Insurance Premium
While EV premiums are typically higher, here’s how to reduce them:
- Install anti-theft devices approved by ARAI
- Opt for voluntary deductibles
- Bundle car and home insurance with the same provider
- Use telematics (if available) to prove safe driving
- Renew on time to retain No-Claim Bonus (up to 50% off)
Government support: Under India’s FAME II scheme, several EV incentives also reduce registration and insurance costs. Check state-specific subsidies.
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FAQs about Buying EV Insurance
Q1. Is EV insurance mandatory in India?
Yes. Just like any other vehicle, third-party insurance is legally required under the Motor Vehicles Act.
Q2. Can I get the same insurance for an EV as for a petrol/diesel car?
Not recommended. EVs need specialized policies to cover battery, charging setup, and electrical risks.
Q3. Why is EV insurance more expensive?
Because EVs have expensive parts, higher repair costs, and fewer repair centers. But the gap is narrowing as more insurers enter the space.
Q4. Is battery theft or damage covered?
Only if you’ve purchased battery protection add-ons. Otherwise, battery damage may be considered wear-and-tear.
Q5. Which is the best insurer for EVs in India?
Top players include HDFC Ergo, ICICI Lombard, Tata AIG, and Digit, all offering dedicated EV plans with battery and charger coverage.
Q6. Can I insure a second-hand EV?
Yes. Most insurers offer coverage for used EVs, but premium and battery health certification may be required.
