Premium Of Electric Car Insurance May Reduce

Automobile industry is witnessing a transformation across the globe. In India the acceptance of electric vehicles is increasing. The government is also promoting the use of electric vehicles by providing subsidies. The cost of electric vehicles is also coming down, making them more affordable. The range of electric vehicles is also increasing, making them a viable option for long distance travel.

Will the insurance premium decrease for electric vehicles (EVs)?

There are few reasons for higher premium of EVs. Those reasons are as follows –

1) High Cost Of EVs As the auto industry is in transformation the car makers are struggling to reduce the manufacturing cost. But as the quantum of the car will increase the cost of the car will decrease. If the value of the car will decrease the insurance premium is bound to go down.

2) Expensive Spare Parts – This is an initial phase for EVs the spare parts are expensive. Major component of EVs is the battery and the manufacturing of the batteries are expensive but the car makers are doing their best to innovate cheaper and efficient batteries. We might see better batteries which may be cheaper in cost and reduce the cost of the vehicle.
3) Higher Probabililty Of Battery Replacement – Though the cost of battery is expensive the repairing cost is even higher. Most of the batteries comes with an expiry date it means the customer have to replace the battery. Even in case of accident, replacing the battery is cheaper option then repairing.
4) Limited Mechanic Expertise – As the EVs are new and limited in the market the expertise to repair it is also limited. Service and repair the EVs require special skilled mechanics and this talent is also limited. This makes the repair of EVs expensive.

These are the few reasons which are making the cost of insurance very high. But as per my understanding as and when these conditions will improve the cost of insurance will also decrease.

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