ACKO’s Extended Battery Warranty plan would cover the battery life of the EVs till the fourth or the fifth year and provide performance coverage for up to 60,000 kilometres
EV components will also be covered under the newly-launched comprehensive insurance plan
The insurtech unicorn’s foray into the EV insurance space comes almost a month after it acquired digital health platform Parentlane to expand beyond its core insurance offerings
Bengaluru-based insurtech unicorn ACKO has announced the launch of ‘Extended Battery Warranty’ plan, an insurance plan for batteries of electric vehicles (EVs), in partnership with electric two-wheeler original equipment manufacturers (OEMs) Ola and Ather.
In an attempt to address customer concerns around battery life and performance, ACKO’s Extended Battery Warranty plan would cover the battery life of the EVs till the fourth or the fifth year and provide performance coverage for up to 60,000 kilometres.
EV components will also be covered under the newly-launched comprehensive insurance plan.
The partnership with OEMs will improve the affordability of EVs given the banks will be able to extend the loan duration for vehicles and thus, reduce the EMI instalments, ACKO said in a statement.
Founded in 2016 by Varun Dua and Ruchi Deepak, ACKO is a digital insurance policy provider. In October 2021, the startup entered the direct-to-consumer auto insurance space in the country. It claims to have one of the biggest market shares in embedded insurance products like mobility and gadget insurance in partnership with over 50 leading players including Ola, OYO, redBus, Zomato, HDB Financial Services, among others.
ACKO’s foray into the EV insurance space comes almost a month after it acquired digital health platform Parentlane to expand beyond its core insurance offerings.
“The Indian EV journey is an aggressive growth story which has propelled the demand for customised protection solutions amongst customers. Our research report found a demand for these solutions from 79% of the respondents,” Animesh Das, VP of motor underwriting at ACKO, said.
“The report also underlined that 67% of EV owners want to own an insurance policy with their EVs. We are confident that with our partnership, OEMs will be better equipped to answer the doubts in customer minds about longevity and performance of the EVs,” Das added.
In fact, along with concerns such as inadequate charging infrastructure, one of the major pain points for EV adopters right now is the lack of financial facilities like loans and insurance, which are otherwise amply available for conventional internal combustion engine (ICE) vehicles. Besides, the batteries and other components have different longevity levels in EVs, which necessitates the need for comprehensive insurance solutions.
As per ACKO’s report, developed in collaboration with data analytics firm YouGov and which surveyed over 1,000 respondents who were either EV owners or intended to own EVs, 66% respondents said they assumed that battery of EVs lasts between two to five years only. About 70% of the respondents were also willing to pay a premium to get EV-specific insurance.
Comprehensive insurance for EVs can also boost the market for loan providers, which would further encourage adoption. Recently, some of the major insurers like Bajaj Allianz General and HDFC ERGO have also started providing insurance policies for EVs.
Meanwhile, helped by the Centre’s FAME II subsidy scheme, EV adoption is on the rise in the country over the last few years. As per the government’s latest data, India had a total of 21.7 Lakh registered EVs as of March.
With the growing demand for EVs, the global EV Insurance market size is expected to grow to $687.62 Bn by 2029 from $64.18 Bn in 2022, as per a Fortune Business Insights report.