EV Car Insurance Claims 14% Costlier Than ICE Cars

According to Policybazaar data, the average insurance claim cost for electric cars is 14% higher than for comparable internal combustion engine (ICE) cars. Among cars in their first three years of ownership and priced between ₹10 lakh and ₹15 lakh, the average claim for EVs stood at ₹41,543, compared with ₹36,185 for ICE cars. The comparison excludes large-loss claims.

Policybazaar said the higher claim costs for EV can be attributed to battery systems, electronics, imported components and limited EV repair infrastructure. Around 80% of EV owners opt for at least two key insurance add-ons, including battery protection, zero depreciation, roadside assistance and consumables cover. This compares with 77% among diesel car owners and 75% among petrol car owners.

Battery protection cover adoption among EV owners has increased from 51% to 70% over the past six months. The cover can provide protection against risks such as water ingress and power surges, subject to policy terms and conditions. Policybazaar also noted that components such as battery cooling systems, electronics and infotainment systems can involve higher replacement costs. In some models, battery replacement can account for 40–50% of the vehicle total cost.

Among different EV body styles, SUVs recorded the highest claim frequency at 31 claims per 100 insured vehicles, followed by hatchbacks at 28 and sedans at 26. During the monsoon, average EV claim severity rose to around ₹65,000 from approximately ₹52,000 during the rest of the year, representing a 25% increase. Flooding, waterlogging and adverse weather conditions were among the factors contributing to the rise.

East India recorded the highest EV claim frequency at 41 claims per 100 insured EV, followed by North India at 34, West India at 32, Northeast India at 30 and South India at 27. At the city-tier level, Tier-II cities recorded 33 claims per 100 insured EVs, compared with 30 in Tier-I cities and 27 in Tier-III cities. Paras Pasricha, Head of Motor Insurance at Policybazaar, said the data highlights a different risk profile for EVs and ICE vehicles, with EVs showing higher average claim costs and greater adoption of add-ons such as battery protection.