Planning to buy a Tesla in India? Insurance may cost you ₹2.2 lakh, and still miss key covers

With Tesla making its India debut last week, insurance of electric vehicles (EVs) has invited renewed interest among auto enthusiasts and potential owners. EVs come with their own set of risks and maintenance concerns, especially when it comes to protecting batteries. “The battery alone can account for up to 60% of the vehicle’s total cost, making it the most expensive and financially sensitive component,” says Paras Pasricha, head of Motor Insurance at Policybazaar.

Even events such as water entering the car devices during the monsoon or electrical short-circuiting can destroy the battery, necessitating repairs or replacements. “Fortunately, if policyholders opt for a battery replacement rider, such damages can typically be covered. Given the high-tech nature of EVs, selecting a comprehensive insurance plan is not just advisable, but necessary,” Pasricha adds.

To strengthen protection, EV owners should also look beyond just the basic cover. Add-ons such as zero depreciation, 24x7 roadside assistance, return-to-invoice cover, and consumables cover offer expanded financial security in case of accidents or equipment failure and help reduce out-of-pocket costs during claims.

“Customers can compare plans from leading private insurers like HDFC Ergo, ICICI Lombard, and Reliance General Insurance, as well as public-sector providers such as New India Assurance. For a high-value EV like Tesla, with an Insured Declared Value (IDV) of ₹55.9 lakh, the annual premium can range from ₹40,000 to ₹2.2 lakh, depending on the features, add-ons, and insurer selected,” Pasricha explains.

What is not covered?

However, it is equally important to understand what standard insurance policies typically exclude. These include routine wear-and-tear or depreciation of parts, unless a zero-depreciation add-on is chosen.

“Mechanical or electrical failures that are not related to an insured event, such as gradual battery degradation, are not covered under your comprehensive insurance policy unless you opt for a battery-specific add-on or an extended warranty,” says Naval Goel, founder and CEO of PolicyX .com. 

Similarly, tyre and tube damage is normally not covered unless caused by an accident. “In cases where a cover note has not been issued, claims for driving under the influence, unauthorised, or without a valid licence are not admitted. Insurers also don’t pay for consequential losses, damage from war or nuclear risks, or incidents that occur outside India,” adds Goel. A cover note is a temporary document issued by an insurance company that provides proof of insurance coverage until a final insurance policy can be issued.

“Also, watch out for red flags such as delays in claim servicing, customer complaints about surveyors, or issues such as insurers refusing to pay GST on claims or denying coverage for vehicle breakdowns,” Goel says.

Hence, if you’re planning to buy a Tesla, the thumb rule, according to experts, is to check for recurring additional costs that you must pay every year to protect your vehicle from unwarranted things.