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By Rakesh Goyal, Director, Probus Insurance Broker
Electric vehicles (EVs) are battery-powered vehicles, primarily cars, with electric motors powered by rechargeable batteries. Since EVs do not use an internal combustion engine, there are no tailpipe emissions. Hence, they are largely known as “Green Vehicles”.
What is Electric Vehicle (EV) Insurance?
EV insurance is often complex and technical. Understanding the different ways to make a claim or even just understanding what it means to have an EV insurance policy can be confusing. Our goal in this article is to explain EV insurance in simple terms:
Electronic Vehicle Insurance (EV insurance) is a new type of motorised vehicle insurance for cars and other electric vehicles. It covers bills and expenses during vehicle breakdowns and insures the vehicle against damage, theft, etc. The growing availability of electric vehicles (EVs) has created new opportunities for insurers to develop products tailored to the policies of EVs. Electronic Vehicle Insurance (EV insurance) is one example of this concept, providing motorists with vehicle coverage.
Why does EV Insurance need to be Normalised?
To make the lives of EV users easier, there is an inevitable need to normalise electric vehicle insurance. EV Insurance Normalisation is a matter of crucial importance when it comes to the future of vehicle operations, as well as our economy. Electric vehicles are not yet a large part of road traffic, but they are definitely making progress. For them to reach their full potential and be sustainable options for all types of people, we need an environment that allows them to thrive.
How can EV Insurance be normalised?
EV Insurance can be normalised only if the buyers’ concerns are addressed comprehensively for them to make an informed choice about their EV insurance. There are many hurdles in the way of EV insurance becoming normalised.
These include:
- EV drivers have little knowledge about the risks associated with their EVs.
- Some insurance companies do not understand EVs properly.
- Drivers are still not willing to pay higher premiums just because they own an electric vehicle.
- Electric vehicles are different from conventional cars, so there’s not enough risk data available from those routes.
However, EV insurance can be significantly normalised if –
- Insurers develop innovative and sustainable premium packages for consumers.
- State governments and automakers play an integral part in encouraging EV users to insure their electronic vehicles.
- All Insurance companies ensure an adequate level of insurance and reasonable pricing for their customers.
- Availability of primary consumer education to encourage EV users to get EV insurance ASAP.
- Collaborative involvement of financial institutions, insurers, and lawmakers to provide a successful push for EV insurance.
Bottom Line
There is no one-size-fits-all solution for normalising EV insurance. The industry must work together with insurers, policymakers, legislators, and regulators to come up with a solution that helps electric vehicle owners get affordable coverage for their vehicles.
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