Good News for Electric Vehicles: Insurance industry going green with their auto plans

EVs or Electric Vehicles are becoming increasingly popular in India for their eco-friendliness, economical fuel cost, lower maintenance expenses, etc.

IRDAI recently announced that Third Party premium rates for insurance of private EVs will be given at 15% discounted rates from FY 2019-20. Photo: Pixabay

EVs or Electric Vehicles are becoming increasingly popular in India for their eco-friendliness, economical fuel cost, lower maintenance expenses, etc. The central government has undertaken many initiatives to boost the adoption of EVs. The Ministry of Road Transport and Highways is also pushing the agenda of adopting EVs at a rapid pace in India through incentives and discounts. So, taking a cue from these developments into the EVs, the insurance industry is also gearing up for the EVs.

Vivek Chaturvedi, Head of Marketing and Direct — Online sales at Digit Insurance said, "The Insurance Regulatory and Development Authority of India (IRDAI) recently announced that Third Party (TP) premium rates for insurance of private electric vehicles will be given at 15 per cent discounted rates from FY 2019-20. It is a very high standard set by IRDAI for how industries related to automotive can help the government in raising awareness and adoption of electric vehicles in the country."

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He said that the policy which has been effective since 16 June 2019, is available on all TP insurance provided through several channels and underwriting offices. As third-party insurance is mandatory, insurers must make it available for the customer. Cheaper TP rates would have a direct impact on EV adoption behaviour. Earlier, there was no separate category for electric vehicles. A Niti Aayog report predicted that there could be a sales penetration of EVs to the tune of 30 per cent in private cars and 80 per cent in two/three-wheelers by 2030. The expected boost is due to such initiatives and a push from the government.

"Considering the focus by the Government as well as industry bodies for a greener and sustainable future, it is critical for consumers to adopt electric or sustainable modes of transport to achieve that vision. A small change can go a long way to build a greener environment. For now, IRDAI is supporting by cutting costs on insurance for sustainable transport. It’s time for you to take your next step for a sustainable future," Vivek Chaturvedi of Digit Insurance concluded.

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