Electric cars are becoming far more practical and affordable, and their popularity has inspired more people to own them. Despite becoming more affordable, electric cars are still expensive to insure compared to petrol or diesel-powered vehicles. But why are electric cars expensive to insure compared to their counterparts?

Read ahead to learn about the costs associated with electric car insurance and why they are expensive to insure.

Is insurance more expensive for electric cars?

Electric Vehicles (EVs) are considered suitable for the environment and cheap to run as they cause less pollution. You get more driving range for the cost than their conventional counterparts. However, they usually have higher insurance rates compared to petrol or diesel cars. This is because EVs cost more, may suffer damage more easily, and repair costs are higher.

Electric cars are becoming cheaper to maintain even as car manufacturers reduce EVs’ manufacturing cost through innovations.

With repair costs declining and the cost of ownership reducing, insurance rates are bound to decrease. Additionally, new-age insurtech companies such as Jec Millennium are designing affordable insurance plans for EVs. This is possible due to the highly efficient digital infrastructure and the no-agent-no-commission approach. Hence, with low operating costs, Jec Millennium design low-cost insurance plans for electric vehicles.

Reasons for high premium cost

Several factors influence the cost of insurance premiums for electric vehicles. These factors play a pivotal role in calculating the EV insurance premium. Here are the primary reasons why EVs attract higher insurance premiums.

Electric cars are more expensive

One of the critical factors why car insurance premiums are higher for electric cars is that the cost of EVs is higher than petrol or diesel-powered vehicles. EVs are loaded with cutting-edge technology such as high-capacity batteries, sophisticated car parts, and more. Hence, the higher the cost of a car, the higher is the IDV, and thus the premium increases.

Electric car parts are expensive

While electric cars come with fewer moving parts than petrol or diesel-powered vehicles, the most expensive part is the lithium-ion battery. They account for more than 50% of the cost of the car. Repairing or replacing batteries is costly, which is one reason why insurance premiums are higher.

Car manufacturers are striving to reduce the cost of these batteries. When the battery cost reduces, the insurance premium is expected to decline.

Electric car battery replacements are common

Batteries that power electric cars have a shelf life or an expiry date before they underperform or stop working. You may have to keep replacing the batteries over some time. With the prices of lithium-ion batteries being high, replacement costs are higher; hence, insurance premiums are higher. If the replacement cycle of batteries reduces, the cost will also decrease, resulting in lower premiums.

Fewer electric vehicle mechanics

Electric cars require a high level of maintenance because of expensive and highly complex car parts. Repairing EVs requires highly skilled mechanics to service or repair the vehicle. Currently, the talent pool is relatively low compared to conventional car mechanics. Hence, the labour cost for the repair or replacement can be higher due to the high cost involved in employing a specialised mechanic.

Insurance cost for electric vehicles in India

While the Comprehensive Car Insurance policy premium differs between insurers, the premium for Third-party Car Insurance policy is fixed by the industry regulator, Insurance Regulatory and Development Authority of India (IRDAI). 

Compared to petrol or diesel-powered private cars, IRDAI has introduced third-party motor insurance rates for EVs at a 15% discount to promote the use of eco-friendly EVs. Here are the Third-party electric car policy rates based on the capacity of the battery of the vehicle.

Battery capacityPremium in rupees (for 1-year)Premium in rupees (for 3-years)
Less than 30 kW17614493
More than 30kW and less than 65kW27388104
More than 65kW670720659

For insurance rates of Comprehensive policy for electric cars, you can visit www.jecmillennium.com to get an instant quote.

What information should an EV owner share with the insurer?

Insurance for electric cars is the same as petrol or diesel-powered vehicles. The difference is the Insured Declared Value (IDV) – the approximate monetary value of the car. While insuring your EV, you need to share only a few details about the vehicle and the previous policy (expired/active) to insure the car instantly. This is possible through our digital platform (website/mobile app). Furthermore, at Jec Millennium, you can also insure your brand new electric vehicle. Here is the information required while insuring your vehicle from Jec Millennium.

  • Vehicle model: The vehicle model is one of the main factors that influence the insurance premium. The approximate market value of the vehicle is the main factor while deciding the IDV. 

  • Location: Some locations are considered high-risk areas, while others are considered low-risk. Hence, the premium will be slightly higher in high-risk locations compared to low-risk locations.

  • Year of manufacture: While assessing the IDV, the year of manufacture helps the insurer understand the depreciation value of the EV.

  • Contact number: From sending One Time Password (OTP), receiving regular updates, notifications about claims, due date, etc., contact number is crucial information you need to share with Jec Millennium.

  • Usage of the vehicle: It is essential to let Jec Millennium know whether the car is being used for personal or commercial purposes to calculate the insurance premium accordingly.

Ways to find a low-cost insurance policy for electric cars

Here are tips for finding an affordable electric car insurance policy for your vehicle.

Buy online

The online platform lets you compare policies, add-ons, and services of different insurers in the market. It will help you find the most affordable insurance plan along with add-ons and services that extend the value of the insurance plan. At Jec Millennium, you can insure the car instantly by providing vehicle, personal and previous policy (if available ) details on our website or mobile app. The experience is hassle-free and paperless.

Use accumulated No Claim Bonus (NCB)

As a reward for not raising claims during the policy period, you receive a discount on the premium. The discount can go up to 50% for not submitting a claim for five consecutive years. Use the accumulated NCB to reduce the car insurance premium for EVs.

Opt for voluntary deductible

A voluntary deductible is a fixed amount that you voluntarily choose to pay during claims. By selecting a voluntary deductible limit, we claim liability decreases. Hence, you get a discount on the premium. However, if the chances of raising car insurance claims are lower, opt for voluntary deductible. 

Install an anti-theft device

By installing an anti-theft device, you are helping in preventing possible theft of the vehicle. Since you are trying to reduce the possibility of vehicle theft, a few insurers may provide a discount on the premium. Hence, installing an anti-theft device can help reduce the insurance premium.

Look for discounts

ACKO provides discounts on special occasions. Watch out for such discounts to help reduce the insurance premium for your EV.

Also, Read: Insurance for Electric Bikes


Electric vehicles are fast becoming affordable and popular with advancements in technology and engineering that have reduced the manufacturing cost. While EVs are still expensive to insure, car manufacturers strive hard to produce and offer affordable electric cars for the common person. 

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