Finance & Loans

Are Electric Vehicles Required to Have Insurance Coverage?

Electric vehicles are the new in thing. This development in battery technology finds its roots in soaring fuel prices and that fuel being a non-renewable source of energy. Electric vehicle not just offer another alternative to traditional internal combustion (IC) engines, but also provide a cleaner and greener energy source. Thus, the Union government also extends its support by way of Faster Adoption and Manufacturing of Hybrid and Electric vehicle (FAME) subsidies to buyers of these electric vehicles based on the criteria set. So, if you are planning on buying a new car this 2022, make sure to consider an electric car.

Does an electric car required to have insurance coverage?

The Motor Vehicles Act that governs the insurance requirements for vehicles states that all vehicles registered in the country, be it under a private registration or for commercial use, must have a valid insurance policy. This includes the electric vehicles alongside the traditional fuel-operated engines. Hence, to legally drive an electric car in 2021, you need to have car insurance policy. While you can buy this car insurance online, it makes sure to protect you, the policyholder, against financial hiccups that might arise due to accidents and damages to the car.

What is the need to have insurance for electric cars?

Here are the following reasons why you must purchase an insurance cover for your brand-new electric vehicle.

  1. Legal requirement

The foremost requirement to buy an insurance for your electric car is legal requirement. As discussed above, the Motor Vehicles Act of 1988 makes it mandatory for all vehicles registered in the country to have mandatory insurance coverage. This requirement does not any vehicles with different fuel types and hence, and insurance plan needs to be purchased for electric vehicles to comply the law. Non-compliance of the same attracts hefty penalties which may even lead to imprisonment. As per the minimum requirement, a third-party cover is bare minimum as prescribed the regulator, Insurance Regulatory and Development Authority of India (IRDAI). Owing to digitisation, you can even buy third party car insurance online. You can visit the official website of IRDAI for further details.

  1. Coverage for own damages

Accidents are unpredictable in nature. Damages during accidents can have a financial blow and that’s where a car insurance policy comes to the rescue. Such policy not only covers the injuries to the driver, but also the damages to your car. However, the coverage of the policy is the deciding factor on what is covered and what isn’t. Considering the complicated battery technology involved in electric cars, any repairs do not come cheap and hence a comprehensive policy is advisable to cover the cost of these own damages. * Standard T&C Apply

  1. Third-party coverage

As mentioned above, a third-party coverage is the bare minimum requirement and must be included in your insurance cover. Such third-party covers protect you, the policyholder against legal liabilities that may result due to injuries to a third person or damage to their property. Considering it is the minimum legal requirement, the car insurance prices of a third-party plan is regulated by the IRDAI. You can visit the official website of IRDAI for further details.

  1. Personal accident cover

Apart from a third-party cover, a personal accident cover is also required to be purchased by all policyholders. However, the latest regulation has unbundled such cover and does not require you to purchase a personal accident cover with each insurance policy. This avoids any duplicate personal accident insurance cover. * Standard T&C Apply

While a car insurance policy is mandatory for your electric car, make sure to take full advantage of the coverage offered by your insurance plan. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

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