As electric vehicles (EVs) gain traction, ensuring the longevity and performance of their batteries is critical for owners. Battery protect add-ons, often included in comprehensive insurance policies for four-wheeler EVs, offer a vital layer of protection against costly battery damage or replacement. These add-ons safeguard your investment, covering risks such as water ingress, power surges, short circuits, and unexpected failures, thereby enhancing peace of mind and financial security.
This article was inspired by discussions with members of an EV-focused Facebook group who reached out to me, seeking clarity on battery protect add-ons and their role in EV insurance. As a passionate EV advocate—not an insurance agent—I have no financial stake in sharing this information. My goal is to provide insights based on a careful review of policy wordings from various insurance companies, which I sourced directly by posing as a prospective EV buyer. In this article, we will discuss these policy wordings to help you understand the nuances of battery protect add-ons.
The Insurance Regulatory and Development Authority of India (IRDAI), established under the IRDAI Act, 1999, is the apex body overseeing India’s insurance sector. Its primary mission is to protect policyholders’ interests, promote the growth of the insurance industry, and ensure its financial stability. In the context of four-wheeler electric vehicles (EVs), IRDAI regulates insurance policies, including battery protect add-ons, by setting guidelines that ensure transparency, fair pricing, and adequate coverage. Each battery protect add-on must be approved by IRDAI, which assigns a unique Unique Identification Number (UIN) to each add-on for every insurance company based on their specific policy wording. This UIN ensures traceability and compliance with regulatory standards. IRDAI also mandates insurers to offer clear policy wordings, approve innovative products tailored for EVs, and maintain solvency to honor claims, fostering trust and supporting the EV ecosystem’s expansion.
In insurance terms, "Own Damage" refers to coverage that protects the insured vehicle, such as a four-wheeler electric vehicle (EV), against financial losses resulting from damage to the vehicle itself due to a variety of insured perils. This coverage is distinct from third-party liability and focuses solely on repairing or replacing the insured’s vehicle. The policy outlines specific events or insured perils covered under this section, playing a crucial role in determining the scope of protection offered to the vehicle owner. A key concept here is the Insured Declared Value (IDV), which represents the maximum sum insured or the current market value of the vehicle (minus depreciation) as agreed upon at the time of policy issuance. The IDV is critical as it determines the compensation amount in case of total loss or theft.
The insured perils listed in a standard Own Damage policy include:
This section serves as the foundation for assessing the extent of coverage, and buyers should review these insured perils carefully. If dissatisfied with one company’s terms, it is advisable to explore policies from other insurers to ensure adequate protection. However, despite these insured perils, a battery protect add-on remains necessary as it specifically addresses unique risks to the EV battery, such as water ingression or electrical faults due to power surges etc, which may not be fully covered under standard Own Damage policies, including consequential damage.
We will now see different policy wordings, I was able to source. This will give an idea of what to expect and how you can make an informed decision. I re-iterate, these were random choices for policies. They can check with other insurers as well.
HDFC ERGO General Insurance Company Limited offers an Electric Vehicle Add On Covers for Electric Vehicle – Prospectus, which includes specific policies for EV owners. The focus here is on Cover 1: Battery, Charger, and Accessories Cover, which indemnifies the insured for loss or damage to their battery (including detachable batteries), wall box charger, standalone charger, and charging accessories caused by perils insured under Own Damage, subject to the terms, exceptions, deductibles, conditions, and limitations of the Policy. The maximum liability is limited to the Sum Insured specified in the Policy Schedule against this cover. However, this policy explicitly does not include coverage for water ingression, a significant exclusion that EV owners should note. The claim amount under this cover differs from the standard policy, as it focuses on a set amount of cover just for this battery protect add-on, potentially signaling a higher premium amount if a higher cover is sought after. It also requires confusing calculations in my opinion.
Among the exclusions listed, point 11 states: "Any loss or damage due to power outages, surges or dips, or any improper voltage or current supplied." This exclusion highlights limitations in the policy, particularly for electrical components that may be vulnerable to such conditions.
In contrast, HDFC ERGO’s Electric Motor Cover provides a different scope, agreeing to indemnify the insured for loss or damage to the propulsion motor and its related internal child parts arising out of water ingression and/or leakage of any oil or grease, subject to the terms, exceptions, deductibles, conditions, and limitations of the Policy. This inclusion of water ingression in the Electric Motor Cover underscores a key difference, suggesting that EV owners needing protection against water-related damage to the battery, charger, or accessories should consider additional add-ons or alternative policies that address this gap.
Tata AIG’s EV insurance policy offers robust coverage for electric vehicle owners, providing financial protection against partial, total, or constructive total loss, destruction, or damage to the electric vehicle, including charging equipment. Key benefits include coverage for damages arising from arcing, self-heating, leakage of electricity, short circuiting, and notably, ingress of water—risks that are critical for EV battery and charging system integrity. This comprehensive approach ensures that owners are safeguarded against a wide range of electrical and environmental hazards, offering peace of mind and reducing out-of-pocket expenses for repairs or replacements.
A significant advantage is that Tata AIG pays up to the Insured Declared Value (IDV) mentioned in the policy schedule, which represents the maximum liability and the current market value of the vehicle (minus depreciation). This ensures that in the event of a total loss, owners receive compensation aligned with the vehicle’s worth, making it a valuable feature for those seeking full protection.
ACKO offers a unique approach to EV insurance through its Zero Depreciation Plan, which integrates battery protection without requiring a separate add-on. This plan provides 100% coverage for the battery, power train components, and charger (bought together with the vehicle) against accidents, floods, theft, natural calamities, rat bites, and short circuits. This comprehensive coverage ensures that EV owners are protected from a wide range of risks without the need for additional policies, simplifying the insurance process and potentially reducing costs.
By including battery coverage within the Zero Depreciation Plan, ACKO eliminates the complexity of standalone add-ons, offering a seamless solution that covers repair or replacement costs fully, subject to the terms and conditions of the policy. This approach is particularly beneficial for owners seeking robust protection for critical EV components.
Based on the available information, none of the insurers—HDFC ERGO, Tata AIG, or ACKO—explicitly include consequential damage coverage as a standard feature in their primary EV insurance policies or add-ons detailed in the provided data. Consequential damage, which refers to indirect losses such as loss of use or additional expenses resulting from the initial damage, is not mentioned in HDFC ERGO’s Cover 1 (Battery, Charger, and Accessories Cover) or Electric Motor Cover, nor in the exclusions where it is noted as not covered unless specified otherwise. Tata AIG’s policy, covering partial, total, or constructive total loss up to IDV, and ACKO’s Zero Depreciation Plan, offering 100% coverage for battery, power train components, and charger against specified risks, also lack explicit mention of consequential damage. As of 05:27 PM IST on Sunday, June 22, 2025, the term is not mentioned in the policy. EV owners seeking such coverage should consult the insurers directly and seek clarification. Do make sure to keep all communications over e-mail.
Bajaj Allianz General Insurance Company Limited stands out with its Electric Vehicle/Hybrid System Protection Cover, uniquely including consequential damage coverage for internal child parts of the Traction Battery, Battery Management System (BMS), and Electric Vehicle Drive System. This coverage extends to damages arising from unexpected power surges, spontaneous exothermic reactions, water ingress, and short circuits, offering a significant advantage over competitors like HDFC ERGO, Tata AIG, and ACKO, which do not explicitly include consequential damage. Additional benefits include indemnification for the full cost of replacing the Traction Battery with a new or equivalent model, subject to the age-based admissibility criteria, rather than being limited to the Insured Declared Value (IDV). With 100% coverage for vehicles up to one year old, decreasing to 60% for those over five years, providing transparency in the policy.
As per the policy wordings, compared to others, Bajaj Allianz offers enhanced protection by addressing indirect losses, such as those from water ingress or short circuits, which could otherwise leave owners vulnerable. The drawback I feel is policy’s focus on replacement costs, adjusted by vehicle age, contrasts with IDV-based limits. In the second year for example, user will have to contribute 5% of the replacement cost. The IDV in this case will be greater than battery cost. Hence in IDV based settlement as in Tata AIG or 100% coverage as in case of ACKO will stand beneficial. On the other hand, the inclusion of age-based depreciation table adds transparency and predictability.
Note: Buyers must confirm with all insurers, including Bajaj Allianz, via e-mail regarding the inclusion of consequential damage and the specific window of coverage post-event. For instance, if issues arise two weeks after a flood, it is critical to verify whether the policy covers such delayed damages and the exact timeframe allowed for claims, as this may vary by insurer. They must also enquire if the insurers have any vehicle age based criteria for EV battery protection.
As electric vehicles (EVs) become increasingly prevalent, the importance of battery protect add-ons cannot be overstated. These add-ons provide essential coverage against unique risks such as water ingress, power surges, and degradation, ensuring the longevity and performance of your four-wheeler EV’s battery—a critical and costly component. While standard Own Damage policies and varying insurer offerings from Insurers address many perils, the inclusion of specialized add-ons or comprehensive plans like consequential damage coverage highlights the need for tailored protection to safeguard your investment fully.
Disclaimer: The information provided here is based on my best understanding of insurance policy wordings and related resources as of June 22, 2025. I am not a legal or insurance professional, and this content is for informational purposes only. Readers are advised to consult licensed insurance advisors or legal experts before making decisions. The author is not liable for any legal proceedings or financial losses arising from the use of this information. Always verify details with your insurance provider to ensure accuracy and applicability.
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Suhail Gulati
Suhail Gulati is the founder of ElecTree and an economist by training, with a passion for electric vehicles that goes far beyond numbers and analysis. A former banker turned EV enthusiast, Suhail writes to share the latest insights, trends, and future possibilities in the world of electric mobility. Through ElecTree, he hopes to connect with fellow enthusiasts and anyone curious about the shift toward sustainable transportation. Outside of his work in the EV space, Suhail has a deep love for music, good food, and the thrill of a football match. Whether he’s analyzing market trends or discovering the newest electric innovations, he’s always excited to bring readers along for the journey.