The electric vehicle (EV) market in India is witnessing an unprecedented boom, and with it, the demand for EV insurance in India has skyrocketed. In just three years, EV insurance adoption has surged 16 times, driven primarily by metro cities. This shift highlights the growing recognition of electric vehicles as the future of mobility and the increasing awareness of the need for specialized insurance coverage.
As EVs become more mainstream, it is essential to understand what EV insurance is, why it’s necessary, and how it differs from conventional car insurance in India. This guide explores everything you need to know about EV insurance in India, from coverage benefits to claim procedures.
EV Insurance Demand Soars: What the Data Reveals
According to internal data from Policybazaar, the share of insurance policies for EV cars has expanded from a mere 0.50% in FY23 to 14% in March 2025, currently standing at 8.2%. This massive growth reflects the increasing number of EV owners opting for insurance, ensuring financial protection for their eco-friendly vehicles.
Key Findings from the Report
- 16x Growth in EV insurance policies over the last three years.
- In two-wheeler EVs, insured vehicles now account for 7-8% of all two-wheeler insurance policies under five years.
- The electric scooter market dominates, making up 98-99% of insured two-wheelers.
- The number of policies issued doubled from 10,000 last year to 20,000 this year.
Amit Chhabra, CBO of General Insurance at Policybazaar, stated:
"The accelerating adoption of EV insurance signals India's shift toward sustainable mobility. With the share growing nearly 16-fold in three years, consumers are not only adopting electric vehicles but also recognizing the need for tailored protection."
This sharp increase in EV insurance demand reflects the growing consumer awareness of protecting their electric vehicles against risks such as accidents, theft, and natural calamities. As electric mobility continues to gain momentum, understanding EV insurance policies becomes essential.
What is EV Insurance?
Electric vehicle (EV) insurance is a specialized insurance policy designed to provide financial protection against loss or damage to electric cars and two-wheelers. With the increasing adoption of electric vehicles, EV insurance plays a crucial role in covering unforeseen expenses related to repairs, theft, third-party liabilities, and natural calamities.
Like traditional car insurance in India, EV insurance comes in two main types:
- Third-Party Insurance: Covers liabilities related to third-party property damage, injuries, or death caused by the insured EV.
- Comprehensive Insurance: Provides coverage for damages to the insured EV, third-party liabilities, theft, fire, and natural calamities.
Benefits of Buying EV Insurance in India
Investing in an EV insurance policy ensures financial security and peace of mind. Some key benefits include:
1. Financial Security
EV insurance protects policyholders from significant financial losses due to accidents, theft, or other damages. The insurer covers repair and replacement costs, reducing the financial burden on the vehicle owner.
2. Enhanced Coverage with Add-Ons
A third-party insurance policy is mandatory as per the Motor Vehicles Act, 1988, but opting for a comprehensive policy provides better coverage. Owners can also enhance their policies with add-ons such as zero depreciation cover, roadside assistance, and battery protection.
3. Faster Damage Recovery
EV insurance ensures quick damage recovery, as policyholders can get their vehicles repaired at network garages without worrying about hefty repair costs. This is particularly important given the high cost of EV components such as batteries and electric motors.
4. Legal Compliance
Having an EV insurance policy ensures compliance with Indian motor laws. Driving an uninsured vehicle is illegal and can result in heavy penalties.
5. Peace of Mind
An EV insurance policy offers reassurance that unexpected expenses arising from road accidents, natural calamities, or theft will be covered by the insurer.
Also Read: Commercial Vehicle Insurance Benefits and Coverage Explained
Coverage Under Electric Car Insurance
What is Covered?
- Road Accidents: Covers damages caused by road accidents.
- Replacement & Repairs: Insurer covers the cost of repairing or replacing damaged parts of the electric vehicle.
- Theft Protection: If the EV is stolen, the insurer provides compensation under the total loss clause.
- Fire Damage: Coverage is provided if the vehicle suffers fire damage. If damage exceeds 70%, compensation is given under the total loss clause.
- Natural Calamities: Protection against damage caused by floods, earthquakes, cyclones, and other natural disasters.
- Personal Accident Cover: Mandatory coverage of up to ₹15 lakh for medical expenses in case of an accident.
- Third-Party Liability: Mandatory coverage for damages to third-party property or injuries caused by the insured EV.
What is Not Covered?
- Own Damage (If Third-Party Only Policy): If you do not have comprehensive insurance, damages to your own EV are not covered.
- Drink & Drive Cases: If the driver is found intoxicated at the time of the accident, the claim will be rejected.
- Driving Without a License: Insurance is void if the driver does not possess a valid driving license.
- Consequential Damage: Any damage not directly caused by an accident is not covered.
- Intentional Negligence: If an existing damage is ignored and worsens over time, the insurer will not cover the cost.
- Lapsed Insurance Policy: If the policy expires, no coverage will be provided.
Third-Party Electric Car Insurance Premium Rates in India
The cost of third-party EV insurance is determined by the power output of the vehicle’s motor. The premium rates set by regulatory authorities in India are as follows:
|
Engine Power (KW) |
Third-Party Premium (₹) |
|
Not exceeding 30 KW |
₹1,780 |
|
30 KW - 65 KW |
₹2,904 |
|
Exceeding 65 KW |
₹6,712 |
These rates are fixed and must be paid annually to ensure continuous coverage.
How to Raise a Claim Under EV Insurance?
In the event of an accident or other damage, policyholders need to follow a structured process to claim insurance benefits:
1. Inform the Insurer
Immediately notify your insurer about the accident or damage. Provide details such as the location, time, and nature of the incident.
2. Capture Evidence
Take clear pictures of the damage for documentation. This will support your claim and help in a smoother verification process.
3. Gather Required Documents
Prepare essential documents like the insurance policy, vehicle registration certificate, FIR (if applicable), and driving license.
4. Inspection by the Insurer
The insurance company will assign a surveyor to inspect the vehicle and assess the damages before approving the claim.
5. Repair Process
Once the survey is completed, the EV will be sent to an authorized network garage for repairs. The insurer will directly settle the bill with the garage in a cashless claim.
6. Reimbursement (If Needed)
If you choose a non-network garage, you can pay for the repairs and submit the bills to the insurer for reimbursement.
Conclusion
With the EV market expanding rapidly in India, securing an EV insurance policy is no longer an option but a necessity. The 16x surge in demand over three years underscores the growing awareness among consumers regarding the importance of insuring their electric vehicles.
Opting for the right EV insurance plan ensures financial security, legal compliance, and peace of mind. Whether you own an electric car or a two-wheeler, investing in a comprehensive EV insurance policy is a step toward responsible vehicle ownership.
As the government continues to push for electric mobility and sustainable transportation, the demand for EV insurance in India will only rise further. Ensuring that you have adequate coverage will not only protect your vehicle but also contribute to a seamless and worry-free driving experience.
Also Read: New EV Cars Launching in Upcoming Months: What to Expect?
