EV insurance claims in India cost more than ICE cars
What's the story
Insurance claims for electric vehicles (EVs) are proving to be more expensive than those for conventional petrol and diesel cars in India. According to data from Policybazaar, the average claim severity for EVs is around 14% higher than that of internal combustion engine (ICE) cars in the ₹10-15 lakh price range. The data analyzed vehicles within their first three years of ownership and excluded large-loss claims.
Claim comparison
Claim severity for EVs and ICE cars
The average claim severity for EVs was ₹41,543, compared to ₹36,185 for comparable ICE cars.
Policybazaar attributed the higher costs to factors such as expensive battery systems and electronics, imported components, and a lack of repair infrastructure for EVs.
The company also noted that battery replacement costs can account for as much as 40-50% of a vehicle's total cost depending on the model.
Coverage trends
EV owners opting for more add-on covers
The data also shows that EV owners are opting for more add-on covers.
About 80% of them choose at least two key add-ons such as battery protection, zero depreciation, roadside assistance, and consumables cover.
This is higher than the adoption rates among diesel (77%) and petrol car owners (75%).
The company observed a particularly sharp increase in adoption of battery protection cover among EV owners over the past six months.
Seasonal impact
Monsoon impact on claim severity
Policybazaar's data also shows that the average claim severity for EVs rises to nearly ₹65,000 during monsoon season, compared to ₹52,000 during other times of the year.
This is a 25% increase and can be attributed to flooding, waterlogging and adverse weather conditions.
The company said these factors contribute to higher claim severity during this rainy period.
Claim frequency
SUVs have the highest claim frequency
Among different body types, SUVs have the highest claim frequency at 31 claims per 100 insured vehicles. This is followed by hatchbacks (28) and sedans (26). Policybazaar said the differences can be attributed to factors such as highway travel, road conditions, traffic, and parking-related risks.
Regional analysis
Tier-II cities seeing high claim frequency
The data also shows that the claim frequency for EV insurance is not limited to metro cities.
Tier-II cities have a higher claim frequency of 33 per 100 insured EVs, compared to 30 in tier-I and 27 in tier-III cities.
Regionally, East India has the highest at 41 per 100 insured EVs, followed by North (34), West (32), Northeast (30), and South India (27).