Tesla's India entry pushes insurers to reboot EV coverage
insurance
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Launching its Model Y, a fully electric car priced from over Rs 60 lakh, and opening its first showroom in Mumbai, Tesla gears up to enter the Indian market. With this, the dynamics of EV insurance are also set for a major transformation.
Tesla's entry will go beyond just delivering high-end electric cars. It could fundamentally shift how both consumers and insurers look at EV risk.
What opportunity EVs bring for Insurance market in India?
EV insurance is a specialized form of motor insurance tailored to electric two-wheelers, cars, and commercial EVs. It covers own damage (to the vehicle), third-party liability (mandatory by law), add-ons like battery protection, roadside assistance, and zero depreciation.
With the entry of Tesla, ACKO, Zurich Kotak, and Liberty General have been chosen as preferred insurance partners for Tesla customers in India. In addition to Tesla's preferred insurers, companies such as New India, HDFC ERGO, and ICICI Lombard General Insurance are offering cover for the company's vehicles.
Speaking with ETBFSI, Amit Chhabra, Chief Business Officer, General Insurance, Policybazaar told, private insurers like HDFC Ergo, ICICI Lombard and Reliance General Insurance as well as PSUs such as New India Assurance are readily delivering insurance to EVs.
'For an IDV of ₹55,94,552, the premium ranges anywhere from ₹40,000 to ₹2,20,000 depending on the choice of features and insurer,' he told.
Parag Ved, CEO & Whole-Time Director, Liberty General Insurance Ltd., said, 'Our EV-specific offerings are not retrofitted; they are thoughtfully engineered from the ground up to complement the electric driving experience. Whether it's safeguarding high-voltage batteries, offering roadside recharging, or simplifying claims through our digital-first platform, we have reimagined insurance for a more intuitive, elevated future.'
Notably, IRDAI has also allowed up to 15% discount on Own Damage (OD) premiums for EVs to promote adoption.
Experts also suggest that facilities like telematics-linked insurance (pay-as-you-drive), battery health-linked premium discounts, and faster claim settlements for digital-first EVs are much required in the policies.
Alok Agarwal, Managing Director and Chief Executive Officer at Zurich Kotak General Insurance while speaking on the EV insurance said, 'EV Protect is more than just an add-on cover to your car insurance policy; it is a comprehensive ecosystem of protection that empowers EV owners to embrace electric mobility with confidence, safety, and complete peace of mind. The product embodies our commitment to innovation and sustainability. It marks a significant turning point in the EV insurance space.'
Need for specialized EV insurance with focus on batteries
EV insurance premiums vary based on battery capacity (in kWh) and vehicle value, unlike ICE vehicles that are rated on engine displacement.
Ajay Prabhu, MD - Affinity, Lockton India told ETBFSI that specialized EV insurance is essential to cover these risks, protect high-value components, and boost consumer confidence in India's green mobility transition.
He further highlighted that EV batteries, comprising approximately 60% of vehicle cost, and advanced electronics are expensive to repair, requiring specialized facilities and technicians, which are scarce in India.
'Batteries are vulnerable to damage from accidents, water ingress, or charging issues, often necessitating costly replacements due to safety concerns.'
He suggested that bespoke policies covering battery damage and software risks, like those in Vietnam, can be adapted for India.
Battery insurance is overlooked due to limited awareness, underdeveloped repair infrastructure, cost concerns, and insufficient claims data in India, he said.
Further, experts also suggest that insurers may introduce charging-related covers, such as charging station damage, charger theft/loss cover, and fire risk during home charging.
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