Thinking about buying a new car in 2025? You’ve probably noticed more electric vehicles (EVs) on Indian roads. This likely makes you wonder about the insurance bill. This guide gives you a clear EV vs. Petrol car insurance cost comparison to help you understand the real price difference.
So, is EV insurance more expensive? The answer isn’t a simple yes or no. We’ll walk you through all the details. We will look at the policy’s price, the special discounts you get with an EV, and the total cost of owning your car in the long run.
EV vs. Petrol Car Insurance Cost Comparison: The 2025 Price Reality
Let’s get straight to the point. When you look at the EV vs. Petrol car insurance cost comparison for 2025, you’ll find that insuring an electric car generally costs more. Recent data shows that the average monthly premium for an EV is around $357, while a similar petrol car costs about $248 to insure. That’s a noticeable difference in vehicle insurance prices.
However, if you’re buying an EV in India, you get a special benefit. The Insurance Regulatory and Development Authority of India (IRDAI) gives you a 15% discount on the mandatory third-party insurance premium. This makes one part of your EV’s policy cheaper than a petrol car’s policy.
So, why is the total insurance premium for an EV still higher? The main reason is the “Own Damage” part of the policy, which covers repairs to your own car. This portion costs more for electric cars, pushing the overall price up even with the government discount on third-party coverage.
Sources: The information presented here is based on 2025 data and guidelines from automotive and insurance experts at sources like Cars.com, GoDigit, and Insurify, as reflected in the cited sources.
Why Comprehensive EV Insurance Carries a Higher Price Tag
You might wonder why the “Own Damage” part of your EV insurance costs more. Several factors contribute to the higher car insurance premium for electric vehicles.
First, electric cars often have a higher sticker price. For example, a Tata Nexon EV starts at around ₹14.49 Lakh, while its petrol version is less expensive. Your insurance premium is based on the car’s Insured Declared Value (IDV), which is its market value. A higher car value means a higher IDV, which leads to a bigger premium.
The battery is another big reason. An EV’s battery is its most valuable part, and replacing it can be very expensive. This high battery replacement cost makes insurance companies cautious, as they face a larger financial risk if the battery gets damaged in an accident.
Also, fixing an electric car is a specialized job. EVs need mechanics with special training and specific tools. Getting parts for some models can also take longer and cost more. These higher EV repair costs are passed on through the insurance premium.
Finally, since EVs are still a newer technology, insurance companies are learning about their long-term risks, like how batteries perform over time. They add a small amount to the premium to account for this uncertainty.
Source: The information presented here is based on guidelines from automotive and insurance experts at sources like The Economic Times, Yahoo Finance, and AAA, as reflected in the cited sources.
How to Save on Your EV Insurance?
Even though the overall vehicle insurance price for an EV might be higher, you can find savings, especially in India. The government wants to encourage people to buy electric cars, so they offer a special discount to help you.
The Insurance Regulatory and Development Authority of India (IRDAI) has made it a rule for all insurance companies to give a 15% discount on the third-party (TP) premium for new electric cars. Third-party insurance is the basic cover you must have, and it pays for any damage you cause to another person’s car or property.
To understand how this helps, you can look at how your total premium is calculated:
- Total Premium = Own Damage Premium + Third-Party Premium
- For an electric car, the Own Damage part (which covers your car) is higher. But, the Third-Party part is 15% lower, which helps reduce the final amount you pay.
You should also look at the bigger picture: the total cost of owning the car. While you might pay a bit more for insurance, you save a lot on fuel and maintenance.
5-Year Running Cost Example: Tata Tiago EV vs. Petrol
| Cost Factor | Tata Tiago EV | Tata Tiago Petrol |
|---|---|---|
| Fuel / Electricity | ~ ₹75,000 | ~ ₹3,50,000 |
| Maintenance | ~ ₹25,000 | ~ ₹60,000 |
| Savings with EV | You save over ₹3 Lakh! | – |
This shows that the higher auto insurance rate is often balanced out by much lower day-to-day running costs.
Source: The information presented here is based on guidelines from automotive and insurance experts at sources like The Economic Times, ICICI Lombard, and Kabadigo, as reflected in the cited sources.
Must-Have Insurance Add-Ons for Complete EV Protection
When you buy EV insurance policies, a standard plan is a good start, but it may not offer complete protection. For better coverage for your electric car, you should look at some special add-on covers. These extras are designed to handle the unique needs of an EV.
Here are a few you should know about:
- Battery Protection Cover: The battery is your EV’s most expensive part. This add-on gives you extra protection for it, covering damages that a basic policy might skip.
- Private Charging Equipment Cover: Your home charging station and cables are valuable. This cover protects them from things like theft or accidental damage.
- Zero Depreciation Cover: EV parts like motors and sensors cost a lot. This cover makes sure that if a part needs replacing, you get the full price for a new one without any deduction for age or wear.
- 24/7 Roadside Assistance (RSA): An RSA plan for an EV is a lifesaver. Make sure it specifically offers help for battery discharge, like towing your car to the nearest charging point.
Source: The information presented here is based on guidelines from automotive and insurance experts at sources like Bajaj Allianz, Policybazaar, and Livemint, as reflected in the cited sources.
Navigating the EV Insurance Claim Process in India
Filing an insurance claim for your electric car in India is a simple process. If your car gets damaged, you should first inform your insurance company immediately. After that, you’ll need to document the damage with photos and submit the required paperwork, like the claim form and your vehicle’s registration certificate.
When choosing your insurer, it’s a good idea to pick one with a large network of EV-certified garages. This makes sure that mechanics with special training work on your car.
If you run into any issues with your claim, you have a powerful tool to help you. The IRDAI has set up the Bima Bharosa portal, an online platform where you can register a grievance against the insurance company. This system is designed to resolve complaints fairly and efficiently, giving you added protection.
Source: The information presented here is based on guidelines from regulatory bodies and insurance experts at sources like HDFC Ergo, Shriram General Insurance, and The Economic Times, as reflected in the cited sources.
Frequently Asked Questions (FAQs)
Is car insurance for electric vehicles more expensive?
Yes, comprehensive insurance for EVs is typically 20-25% more expensive due to higher vehicle cost and specialized parts, but third-party premiums are cheaper in India.
What is the main reason for high EV insurance premiums?
The primary reason is the high cost of the battery, which can be very expensive to replace, increasing the financial risk for the insurance company.
Does the Indian government offer any discounts on EV insurance?
Yes, the IRDAI mandates a 15% discount on the third-party liability portion of the insurance premium for all new electric vehicles to promote their adoption.
What is a battery protection add-on in EV insurance?
It’s an optional rider that provides coverage for the repair or replacement of your EV’s battery against damages not typically covered in a standard policy.
What does the EV vs. Petrol car insurance cost comparison look like for 2025?
In 2025, the EV vs. Petrol car insurance cost comparison shows EV premiums are higher for full coverage, but the gap is narrowing and offset by lower running costs.
Final Thoughts
So, what’s the final word in the EV vs. petrol car insurance debate? In 2025, buying full coverage insurance for an electric car still costs a bit more upfront. However, the price difference is getting smaller.
For drivers in India, the government’s 15% discount on third-party premiums really helps. When you add the massive savings on fuel and maintenance, an EV often becomes the cheaper car to own over a few years. The best choice comes from looking at the full ownership journey, not just the initial insurance bill.
For anyone looking to learn more about Auto and Car Insurance, you can explore the high-quality resources and articles at Finance Crave.
