Standard EV insurance policies leave the battery uncovered. Add-ons like EV Shield, zero-depreciation, and correct IDV are required to avoid lakhs in out-of-pocket costs at claim time.
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Electric vehicle owners who assume a standard comprehensive insurance policy covers their battery are exposed to a large gap. The battery accounts for nearly 50% of the vehicle's cost, but most standard policies do not cover it. Battery cover is available only as an add-on, typically under products labeled 'EV Shield' or similar, according to motor insurance experts.
'EV Shield' covers the battery, electric panel, and charging equipment including wall chargers and cables. The add-on typically provides protection against water ingress, short circuits, electrical surges, and accidental damage. Without it, a dented battery casing from a minor collision can trigger a replacement bill in the lakhs, versus a much smaller body-panel repair for an internal-combustion engine car, said Shilpa Arora, Co-founder and COO of Insurance Samadhan.
Because the battery accounts for 40-60% of the vehicle's value, the Insured Declared Value (IDV) is higher for EVs compared with equivalent petrol vehicles. Arora said a common mistake is agents quoting IDV on the ex-showroom price, which produces a lower premium but leaves a shortfall at claim time. The IDV should equal the on-road price minus standard depreciation, and the battery replacement cost must sit inside the IDV envelope.
Zero-depreciation cover is critical. Without it, the insurer can apply up to 50% depreciation on the battery specifically, a large amount given the battery's share of vehicle value. 'Zero depreciation ensures you won't have to pay out-of-pocket for depreciation on replaced parts during repairs,' said Aditya Kumar, Head of Motor Underwriting at Digit Insurance.
EV owners should also consider 'Return to Invoice' as an add-on; it guarantees a payout of the vehicle's full original invoice value in the event of total loss or theft. Add-ons for consumables and tyre cover protect against smaller replacement costs such as coolants and brake fluids.
Own-damage premiums for EVs run 20-40% higher than for a petrol equivalent. EVs get about a 15% discount on third-party premiums, but the own-damage premium is higher because a minor collision that dents the battery casing can trigger a lakhs-worth replacement, Arora said.
Damage to charging equipment from power surges, electrical faults, theft, or accidental damage is not always included in standard policies. Insurers offer separate add-ons extending cover to home charging infrastructure, she said.
Beyond standard exclusions like drunk-driving, insurers can reject battery claims if the owner fails to follow OEM charging and maintenance guidelines, or if unauthorised third-party repairs are carried out.
'EV repair costs are slightly higher than those for ICE vehicles. The EV repair ecosystem in India is still developing, leading to a scarcity of specialised technicians and costly replacement technology,' Kumar said. He advised EV owners to always opt for a comprehensive policy and choose an insurer with a robust garage network and a high claim-settlement ratio.
Monsoon and water damage
A comprehensive motor insurance policy generally covers flooding, inundation, landslides, hailstorms, fallen trees, and rain-related accidents. It may pay for damaged parts, repainting, and repairs after floodwater enters the vehicle.
Own-damage cover under a comprehensive or standalone OD policy pays for damage to your own vehicle from accident, fire, flood, or theft. A third-party cover, which is legally mandatory, only pays for damage caused to others.
The owner must check the wading depth allowed for the vehicle in the policy. If the vehicle stops mid-road after riding through 1-foot water and the depth allowed in the policy is only 150 mm, the claim will be rejected. 'Know your vehicle's wading limit and never ride through stagnant deep water,' Arora said.
The biggest error owners make is trying to start a submerged vehicle. This often causes a hydrostatic lock, which is usually excluded from standard policies because insurers view it as consequential loss rather than a direct accidental event.
'The vehicle should be left untouched and should be towed to a workshop until a professional surveyor inspects the water damage. Insurers may classify this restart-related damage as avoidable and reject that portion of the claim. Experts recommend switching off the ignition immediately if the vehicle stalls in floodwater,' Arora said.
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