EV two-wheeler fires | Insurance firms not to raise premiums for now

Lately, we have seen many electric vehicles (EVs), especially two-wheelers, catch fire, but insurance companies have said that they will not be raising premiums for this, at least in the near term. 

For a vehicle owner to get a claim on fire, he or she will need comprehensive insurance cover.

Electric scooters catch fire.

Comprehensive insurance is when a third party (the other party, not the vehicle owner) as well as first party — the vehicle owner — are both included in the policy. The other insurance type is third-party cover only.

Top executives of general insurance firms say they will not increase premium now because the amount of claims in two-wheeler EVs are very minuscule. 

Hence, the losses to the insurers will be negligible. But they may raise rates, in case these fire incidents do not abate. 

One of the executives of a general insurance firm said that he is sure that the government as well as manufacturers are working to rectify this. And, maybe, in the middle to long term, these fire incidents will stop.

Another general insurance company said that two-wheeler electric vehicles are less than 1 per cent of its portfolio.

An executive of the firm added that insurance companies are still trying to ascertain the risks associated with electric two-wheelers. 

But this company seems very bullish on the prospects of this segment, at least in the long term.

Fire incidents

Among other two-wheeler makers, Hyderabad-based Pure EV saw its vehicles catch fire and explode.

The company said it will be recalling 2,000 of its e-scooters to check faults in batteries and chargers.

“Due to the recent fire incidents of our vehicles in Nizamabad and Chennai, Pure EV has decided to recall 2,000 vehicles from the ETrance Plus and EPluto7G stable,” the company had stated.

Unfortunately, an 80-year-old man was killed and two others injured when the battery of a Pure EV electric two-wheeler exploded in their house in Nizamabad district of Telangana.

The incident occurred on the night of April 19 in the house where the battery was being charged. It was the fifth incident of a fire in a Pure EV scooter.

Also, a fire broke out in an Okinawa electric two-wheeler in Vellore recently. The fire claimed the lives of a man and his daughter.

Ola Electric was also one of the companies mired by this controversy. It recalled over 1,400 e-scooters and appointed experts to probe the cause of the fire incidents in its e-scooters. 

Ola Electric’s chief executive officer (CEO) Bhavish Aggarwal said, these incidents of fire will slowly become rare but can happen in the future also.

Why the fires and what is the solution?

According to experts, reasons like poor quality batteries, faulty design and carelessness are responsible for the fire accidents.

Also, the batteries are of cheap quality and don’t adhere to safety norms. Manufacturers buy them to save costs.

Their build quality is unsatisfactory and may not be suitable for India’s hot and humid conditions. So, these checks and balances do not happen as of now.

But a stringent regulation by the government on batteries could make these incidents a thing of the past.

However, after the EV fire incidents, the Indian government lost no time in warning the two-wheeler companies, asking them to recall faulty vehicles.

Conclusion

So, after the electric two-wheeler fire incidents, it makes sense for general insurance firms to wait and watch on how the segment evolves rather than raise premiums straight away.