Your EV is insured, but will your policy pay for the battery?

According to a FY26 Motor Insurance Report by Policybazaar, EV battery insurance policies surged by a remarkable 670% between 2025 and 2026. This number that reflects just how quickly electric mobility has grown and the accompanying mandatory motor insurance with it. Telangana recorded the highest overall growth in insured cars at 30% year-on-year.

But when buying motor insurance for EVs, most buyers still purchase insurance the way they did so for their last petrol car. And this can have consequences.

Because an EV is not just another car with a cleaner fuel source. It is a fundamentally different technology on wheels and the risks it carries require a fundamentally different approach to protection.

The battery problem

To the readers and policyholders, do you know what percentage of your vehicle’s value sits in the battery pack?

The answer, depending on the model, is between 40% and 60%. For context, the battery in a Tata Nexon EV costs somewhere between ₹3 and ₹4 lakh. The entire petrol engine in the equivalent ICE model? Around ₹80,000 to ₹1.2 lakh. These are not comparable numbers, and your insurance policy needs to reflect that.

Replacing or repairing a damaged EV battery can cost anywhere from ₹3 lakh to upwards of ₹10 lakh, depending on the vehicle. A minor accident that barely scratches the body can crack the battery casing and trigger a claim of ₹5-7 lakh on a mid-range EV.

A standard comprehensive motor policy does not automatically cover the battery in all situations. Normal degradation, wear and tear, mechanical or electrical failures not linked to an insured event, and damage caused by charging in unsafe conditions are typically excluded. Without the right add-on, that ₹4–8 lakh replacement cost lands entirely on you.

What Standard EV motor insurance Excludes

A comprehensive motor policy covers accidents, theft, fire, and natural calamities. For an EV, this still applies, but what it does not automatically extend to include:

• Battery malfunction or degradation not caused by an insured event
• Electrical short circuits arising from non-accident causes
• Charging equipment: home chargers, portable cables, wall-mounted units
• Software and sensor failures including ADAS, ECUs, and connected electronics
• Water ingress to the battery in some policy wordings, depending on how the event is classified (A recent case involving water ingress to the battery was ruled by a District Consumer Forum in Telangana as payable by United India Insurance because it was caused by floods, a standard insured peril. Click here to learn more about this case.)
• Damage from using non-OEM chargers is a growing exclusion clause that EV owners frequently overlook

Using non-OEM (non-original manufacturer) chargers can trigger battery-cover exclusions in several policies. If you are charging at a third-party station with incompatible equipment, you may unknowingly be voiding a portion of your cover.

Add-Ons for EV policies

The right combination of add-ons can help you better insure your EV:

• Battery Protection Cover covers repair or replacement costs arising from water ingress, short circuits, spontaneous electrochemical reactions, power surges, and fire.
• Zero Depreciation Cover becomes significantly more valuable in an EV context. Without it, a 50% depreciation is typically applied to the battery at the time of claim, meaning you absorb half the replacement cost even with a valid claim. With this add-on, that deduction is waived.
• Charging Equipment Cover extends protection to home chargers, portable adapters, and charging cables, none of which fall under a standard motor policy.
• EV Roadside Assistance includes flatbed towing and mobile charging support which are particularly useful for EVs, which cannot simply be push-started or refuelled at the nearest petrol pump.

India’s Roads

India’s roads are not gentle on any vehicle, and for EVs, the monsoon season introduces risks that go beyond bodywork. Waterlogging in cities like Mumbai, Bengaluru, and Hyderabad means battery compartment water ingress is a genuine concern.

The other important aspect is the software. Modern EVs run on Electronic Control Units (ECUs), ADAS sensors, regenerative braking systems, and connected dashboards. Replacing certain sensors or smart modules post-accident can cost ₹50,000 to ₹2 lakh, damage that a quick visual inspection would never flag but that insurers increasingly need to account for.

Battery-as-a-Service (BaaS)

A growing segment of India’s EV market, particularly two-wheelers and fleet vehicles, is adopting the Battery-as-a-Service model, although with little success. This is where the customer owns the vehicle but leases the battery. This can reduce upfront purchase costs by 20-40%, which sounds attractive. But it also means the vehicle and the battery may have different owners, different insurers, and different claim processes.

If a leased battery is damaged in a flood or accident, the question of who files the claim, and under which policy? Before purchasing an EV under a BaaS arrangement, it is worth explicitly asking your insurer and battery provider how the coverage is structured.

The cheapest EV policy almost always turns out to be the most expensive one the moment you file a battery claim. Before your next purchase or renewal, make sure to ask these three questions:

Is my battery covered?

Under what circumstances?

And how can I make the policy complete?

Your EV might be saving the environment. Make sure your insurance can save your EV.

This blog post is brought to you by the minds at insurancepe!

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