Electric vehicles are the future of the automotive industry. While the combustion engine was a major leap in making transportation faster without the use of animals, the electric revolution is another major leap. Considering the soaring fuel prices, many people are choosing to opt for an electric vehicle as their next upgrade.
To support this growth, the necessary infrastructure like charging hubs and battery technology is also developing at a fast pace. Tomorrow Makers reports that the electric motor vehicle market is expected to grow at a CAGR of 26.8% by the end of 2030. Further, to support this endeavor, the government offers subsidies under the FAME scheme at purchase. In addition, finance obtained for buying is also allowed as a deduction in the income tax return. However, you must note that tax benefit is subject to change in tax laws.
Electric vehicles offer convenience in terms of lower upkeep and repairs that are required compared to a conventional combustion engine. Since the electric vehicle industry hasn’t evolved completely and is in a transition phase hence, some of the vehicles manufactured are hybrid, i.e., run on both fuel and battery power at the same time.
Is motor insurance mandatory for electric vehicles?
Irrespective of the type of fuel, all vehicles registered in the country must have a valid insurance certificate. The Motor Vehicles Act of 1988 makes it mandatory to have one. Thus, vehicle insurance is mandatory even for electric vehicles. With the financial protection of motor insurance, you can obtain coverage not just from legal liabilities, but also for the repairs required to your vehicle. *
What is that you should know about vehicle insurance for electric vehicles?
Until a few years back, there was no separate insurance policy for electric vehicles. But in June 2019, the Insurance Regulatory and Development Authority of India (IRDAI) notified separate premium rates for third-party insurance for electric vehicles based on the battery output capacity. Further, the premium rates are even lower by 15% as compared to private insurance policies. You can visit the official website of IRDAI for further details. *
What are the types of insurance plans that you can purchase for electric vehicles?
Similar to standard fuel-operated vehicles, two types of insurance plans are available for electric vehicles—a third-party policy and a comprehensive policy. While third-party policy is the basic insurance requirement, a comprehensive cover is an optional upgrade that you can buy.
With a third-party liability plan, legal liabilities arising due to injuries to a third person or damages to their property can be insured. On the other hand, comprehensive policies include third-party coverage in addition to own-damage cover and personal accident cover. With a comprehensive insurance plan, you no longer need to worry about expensive repairs to your electric vehicle. Further, any natural disasters or man-made events like theft are also covered by a comprehensive insurance plan. *
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Why do you need to buy insurance for electric vehicles?
All-electric vehicles must be covered under an insurance plan for the following reasons:
- Legal requirement:The foremost reason to buy insurance for electric vehicles is that it complies with the law. As discussed above, the Motor Vehicles Act lays down the regulation, and not having an insurance plan attracts hefty penalties.
- Financial cover for damages:Protection for the damages to your vehicle is another reason why you must consider availing an insurance cover. To ensure financial cover for the repair costs to your vehicle, you need to buy a comprehensive policy or a standalone own-damage plan in addition to third-party liability cover.
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These are some points you must know about motor insurance for electric vehicles. While third party insurance is sufficient for legal compliance, make sure to opt for a comprehensive plan to enhance the policy coverage and ensure a financial shield. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.