Electric Car Insurance
Electric Vehicles (EVs) are the talk of the town these days and for all the right reasons. Around the world, governments and automakers are promoting EVs as a key technology to curb oil use and tackle climate change. The UAE is among the world's top 10 countries as a market that is geared towards electric mobility.
According to EDF Energy, a single EV on the roads can save 1.5 million grams of CO2 (on average) in one year. To put things into perspective, that’s a rough equivalent of 4 return flights from Saudi Arabia to Dubai (incredible, right?). Keeping a greener, cleaner future in mind, the UAE aims to become carbon neutral by 2050.
Now that we are all ready to fight the climate crisis, here’s all you need to know about EVs and how to keep them insured!
What is an Electric Vehicle (EV)?
As the name suggests, it is a vehicle that runs on batteries and gets charged by electricity.
How are Electric Vehicles better?
● Help reduce air pollution
Electric vehicles have been primarily introduced to curb the pollution caused by vehicles that run on fuels like petrol, CNG, and diesel. Fuel-run vehicles emit harmful gases, which cause chronic respiratory diseases, skin diseases, etc., and many other dreadful conditions. EVs use electricity instead of fossil fuels and don’t emit such poisonous gases. Each electric car on the road helps in reducing harmful air pollution and taking a leap towards a sustainable future.
● Eco-friendly and saves the environment
Natural resources are depleting at a rapid pace. And that’s one of the major reasons why electric cars were introduced. EVs create a lower carbon footprint over the course of a lifetime than cars and trucks that use traditional, internal combustion engines. Hence, they are a great initiative towards reducing ecological damage and boosting good health.
What is Electric Car Insurance?
Just like standard Car Insurance for petrol and diesel cars, it is a policy that provides financial protection to your Electric Car (EC) against damages caused by accidents, fire, theft, third-party, and so on.
Why do Electric Cars need to be insured?
You need EC Insurance for the same reasons you need insurance for standard fuel-run cars, i.e. -
● To avoid legal consequences: It is mandatory to own valid Third-Party Insurance as per the law to take a car out. Driving an uninsured Electric Car in the UAE will result in black points, a hefty penalty, or even vehicle confiscation and imprisonment.
● To avoid expensive repairs: If your car gets damaged due to an accident or any mishap, you might incur a huge bill to get it repaired. A comprehensive policy will take care of such expenses and you won’t have to bear the entire bill amount.
● To ensure Third-Party Liability Protection: Having insurance for your car protects you against the injury to a third party or damage to their property you may accidentally cause.
For instance, Maryam has a Comprehensive Insurance Policy for her Electric Car. One unfortunate day, she meets with an accident on the road with an expensive car. This results in significant damages/liability through a court order. Because Maryam has her EC insured, the repair expenses will be taken care of by the insurer.
What is covered under Electric Car Insurance?
All the following situations will be taken care of -
● Accidental damage
Any damages caused to the Electric Car because of an accident will be covered.
● Damages to third-party
The policy will cover any damages caused to the third-party individual or property.
For example, Ahsan’s Electric Car accidentally collided with Nawaz’s (a third-party individual’s) car and it was severely damaged. In this case, the costs of repairing Nawaz’s car will be covered by Ahsan’s insurance company.
● Accidental death and permanent disability of the owner-driver
The insurer will pay in case the owner-driver passes away because of an accident, or gets permanently disabled.
● Theft of the vehicle
The policy will cover theft of the car, too.
● Damages caused due to fire or explosion
Any damages caused to the Electric Car due to fire or explosion will be covered by the insurance company.
What is NOT covered by Electric Car Insurance?
Here’s a list of exclusions, i.e., situations that will not be covered -
● Mechanical or electric failure
If the electric car undergoes any damage due to mechanical or electric failure, it will not be covered by the policy.
For instance, Amara’s Electric Car stops working because of a mechanical issue. In this case, if she raises a claim, the insurer won’t pay her any amount - as damage due to mechanical failure is excluded under the policy.
● Driving under the influence of alcohol or drugs
Drunk driving is a legal offence. If you drive your electric car under the influence of alcohol or any substance, and any damages occur to it, the insurer will not be liable to pay for them.
● Wear and tear
Regular wear and tear damages to the electric vehicle will not be covered by the insurance plan. For instance, light scratches, minor dents, etc. will not be covered by the insurer.
● Natural calamities
As per the T&Cs mentioned in the policy, any damages caused to the electric car due to natural calamities like earthquakes, floods, sandstorms etc., will not be covered.
For instance, Bilal lives in a flood-prone area near the coast. One monsoon, intense rainfall lashed and completely damaged his insured Electric Car. In this case, the insurer will not pay for the damages.
● Reckless driving
If you drive your electric car recklessly, don’t follow the signals, overspeed and get into an accident, your insurer will not be liable to cover the damages caused.
How to purchase a policy for your Electric Car?
You can buy a policy easily by following these 2 quick steps:
Step #1 Visit the insurer’s website
First and foremost, you will have to visit the website of the insurance company or aggregator platform. And enter the details of your Electric Car, such as the make and model, registration year, variant, your driving experience etc.
Step #2 Make the payment
Once you enter all the details, you will be directed to the quote page, where you will find the premium and coverage details of your Electric Car. You can go through them and see if the details shown are proper. You can then select the desired coverage for your car and proceed to make the payment.
What are the documents required to buy Electric Car Insurance?
The documents needed to buy a policy for your Electric Car are similar to that needed for a conventional car. They include -
● Valid driving licence
● Passport and residential visa
● Vehicle registration certificate
● Emirates ID
How to raise a Comprehensive Insurance Claim?
The following steps will help you navigate the entire process -
1. Inform the police
➔ In case of an accident, the first and foremost thing you need to do is inform the police. A car insurance claim cannot be filed without having lodged a police report.
➔ Take pictures of the damages caused to your Electric Car, as well as of any bodily injuries caused to the driver and the passenger(s).
➔ The police will inspect your Electric Car, the place of the accident, and the photographs taken by you.
➔ They will also help you with the police report, which will contain the details of the ‘At Fault Party’ as well as the ‘Not at Fault Party’ and a detailed summary of damages caused to the vehicles involved in the accident.
➔ ‘At Fault Party’ is the one responsible for the accident and needs to make the payment for all others involved in the accident. ’Not at Fault Party’ is the one who was involved in the accident, but is not at fault for causing the same.
➔ In case of any minor accident, you can also report the incident using the UAE Police e-services and apps.
2. Get in touch with your insurer
➔ After obtaining the police report, call your insurer and inform them about the accident.
➔ For a smooth and speedy claim settlement, ensure you give all the correct details pertaining to the accident to the insurance company.
3. Submit the necessary documents to the insurer
A general list of documents needed to raise a claim -
➔ Police report
➔ Car Registration Document (Mulkiya)
➔ Driving Licence
➔ Duly Filled claim form
➔ Emirates ID
➔ Car modifying certificate (if any)
4. Wait for the claim to get assessed
➔ After receiving your claim request and all the relevant documents, the insurer will evaluate your claim, as well as verify the documents submitted.
➔ Once the verification is done, the insurance company will ask you to go ahead with the repair work.
5. Take the Electric Car for repairs
➔ Once you get the go-ahead from the insurance company, you may take your car to the authorised dealer/garage.
➔ The dealer/garage will evaluate the damages and generate an estimate of the repair. They will then share the same with your insurance company.
➔ The repair work will start on your vehicle only when the insurer gives its approval.
➔ Once the repair work is complete, you can collect your car from the dealer/garage.
How to raise a Third-Party Insurance Claim?
A Third-Party claim can be divided into 2 types:
1. Third-Party Property Damage (TPPD)
This type of claim arises when you damage a third party’s vehicle.
➔ If the Third Party has a Comprehensive Car Insurance Policy: In that case, if you hit their vehicle and are at fault for the accident, the third party (whose vehicle got damaged) may contact their insurer for the claim processing. Their insurer will then initiate the recovery from your insurer.
➔ If the Third-Party has a Third-Party Car Insurance Policy only or no insurance policy: In that case, they will have to visit the claims office of your insurer and process the claim directly.
2. Third-Party Bodily Injury (TPBI)
This type of claim arises when you injure a Third Party person, or if they lose their life due to the accident caused by you. Such claims are completely handled by the court.
The steps that are generally followed are -
➔ If there are major injuries or death, the driver of the vehicle (if alive) will be arrested by the police. This is done to protect the recovery rights - as per the Shariah Law.
➔ Under certain provisions, the court may ask for a “Letter of Guarantee” from the insurance company. Along with that, they may also ask for an undertaking, mentioning that the insurer will represent the insured person in the legal proceedings to release the driver.
➔ The “Letter of Guarantee” is a document issued by an insurance company - guaranteeing the payment of any damages caused, or the compensation awarded by the court. It is presented to the court in the case of an accident. The letter acts as proof of insurance for the vehicle involved in the accident.
➔ There are also provisions to release the driver. However, their passport and Emirates ID will be confiscated until the case is ongoing and the settlement is made.
➔ The Public Prosecution Court will judge the criminal negligence. If the insured's criminal negligence has caused the Third-Party individual’s death, then as per Shariah - Diya Money (Blood Money) of a minimum of AED 200,000/- will be awarded to the victim’s family. Along with that, fines and imprisonment may also be imposed on the insured who’s found guilty.
➔ After this, if required, the legal heirs of the injured or deceased Third Party can initiate a further court case to seek appropriate additional compensation.
The future is electric!
Automobile companies are putting more effort into moving from traditional vehicles to electric cars. It’s high time to be mindful, and care a little more for our one and only planet.
So get that electric car, and get it insured - protect yourself and all that’s beautiful around you!