Given the unique technology in electric vehicles (EVs), opting for a battery protection or replacement rider could be a smart choice when buying motor vehicle insurance for your EV. It can help prevent significant out-of-pocket expenses, particularly for those driving long distances regularly or residing in areas with extreme temperatures that can affect battery health.
In an EV, the battery accounts for around 60% of the total cost. It is the most financially sensitive component. Any damage from water ingress or accidents can lead to extremely high repair and replacement costs. Battery replacement due to water ingression or short circuit is covered if you opt for the replacement rider.
Battery replacement and other riders
An essential add-on is a battery protection cover, which addresses risks such as thermal runaway and electrical failures. Additionally, opting for a zero-depreciation cover ensures that the full cost of replacing or repairing parts is covered without any deductions for depreciation. The return-to-invoice cover is another valuable feature. It guarantees that, in case of total loss or theft, the policyholder is reimbursed for the full invoice value of the vehicle rather than its depreciated value.
Subhasish Mazumder, head, Motor Distribution, Bajaj Allianz General Insurance, says given that the battery is one of the most expensive components of an electric vehicle, it is wise to consider a rider for battery replacement coverage. “Battery replacement can be a significant expense, and having this coverage can help mitigate the financial impact,” he says.
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Internal combustion engine (ICE) and EVs operate on different technologies, leading to variations in their insurance coverage. Both types of vehicles require motor insurance that includes third-party and comprehensive coverage. However, the specifics of the coverage and add-ons differ based on their unique requirements. While ICE insurance covers risks like engine damage, gear-box malfunctions or exhaust system repairs, EV insurance needs to account for the complexities of battery systems, electrical components and charging infrastructure.
Some insurance policies may offer coverage for charging equipment, which is another critical aspect of owning an EV. “The charging equipment cover extends to charging cables, home charging stations and other accessories,” says Paras Pasricha, head, Motor Insurance, Policybazaar.com. The roadside assistance feature is also more advanced for EVs since the possibility of an EV being stranded without a nearby charging station is a significant risk.
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