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Electric Car (EV) Insurance
Electric Car (EV) Insurance
Written by
Kervin Mathew
Edited by
Ellie Garran
Reviewed by
Adrian BennettCompare car insurance policies the easy way
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Long story short
EV sales are soaring
In 2024, a record-breaking 114,000 EVs were sold in Australia,1Electric Vehicle Council – 2024 sets new record for EV sales in Australia with lower prices and government incentives possibly driving demand.
EV insurance isn’t that different
Standard comprehensive policies can cover battery fires, charging accessories and more.
Claims can take longer to resolve
EV repairs could take longer due to the need to import parts and the shortage of service centres and trained technicians – further contributing to higher premiums.
EVs are still cheaper to run
Despite higher insurance costs – on average $661 more per year – EVs are about 80% cheaper to run than petrol cars.2Drive.com.au – Why are electric cars so expensive to insure?
EVs charge into Australia
The next time you’re out for a stroll in your CBD or its surrounding suburbs, try doing a quick count of the EVs in the area. You’re bound to see a Tesla or two, plus plenty of the Volt variety. That shouldn’t come as a surprise, because 2024 was a record-breaking year for EV sales in Australia, with 114,000 sold.33 3 Electric Vehicle Council – Media releases This follows a 2023 that saw more than double the number of EVs sold in 2022. Case in point, it looks like EV popularity is picking up speed.
So, why exactly are Aussies starting to embrace being behind the wheel of a battery-powered car? Here are some possible reasons.
Green and clean
EVs are easier on the environment than traditional cars – and quieter to boot.
Government incentives
There’s a slew of tax breaks, rebates and discounts for EV owners – including a zero import tariff and registration fee waivers.
Running costs
Though the initial cost of owning an EV is higher, they’re proven to be around 80% cheaper to run, easier to maintain, and more reliable than traditional cars.4For more information, see Queensland Government – Electric vehicles fact check
In fact, EV prices have started to drop significantly because of a wave of competition and more efficient technologies flowing into the market.
Do I need specialised car insurance for an EV?
No doubt, EVs are a huge shift from traditional cars with their ease of use, smooth rides, and reduced emissions – not to mention the front boots! When it comes to insuring one, though, not much has changed. Generally, you can insure your EV with the same level of cover as you would a conventional car with an internal combustion engine.
Compulsory third-party (CTP)
This is your basic level of cover if you want to register and drive your EV in Australia. It covers your liability for anyone harmed in an accident but doesn’t cover property damage.
Third-party property
It covers damage you cause to other people’s vehicles and property. It doesn’t usually cover damage to your own car.
Third-party fire and theft
It covers not only damage to other people’s cars and property but also your own car if it’s stolen or damaged in a fire.
Comprehensive car insurance
This is the highest level of protection and can cover almost every scenario, whether it’s fire, theft or damage to your car or anyone else’s vehicle and property.
How is an EV different to insure than a regular car?
Most insurers prefer treating EV insurance as nothing more than regular comprehensive car insurance. That said, the current state of the EV market and the way EVs function tend to throw a few variables into the mix.
Cover for battery fires and accessories
A comprehensive policy can cover your EV battery for fires and other loss or damage. It could even cover charging accessories such as charging cables, wall chargers and mounts.
Choice of repairer at no extra premium
You may be able to choose your preferred EV repairer without paying a higher premium or extra fees. This can be a useful feature, considering there aren’t too many EV repairers around.
Mandatory agreed value cover
Your insurer may only offer agreed value cover with their comprehensive policy, as opposed to market value cover. This could be a good thing, considering that electric car prices are expected to continue to drop.
Lengthy repair times impacting claims
With fewer repairers servicing the relatively new EV market, you could be looking at extended repair times. Drawn-out damage assessment and repair times and the need to import parts can make insurance more expensive.
My car insurance premium certainly went up when I swapped my 20-year-old traditional car for an EV. But this isn’t a big deal for me when I consider the long-term benefits. Charging my car costs about a quarter of what I was spending on fuel. So, what I save on fuel can easily go towards my premium. Plus, I get a real thrill out of driving a car that I know is better for the planet. Hopefully, I can get 20 years out of this car too!
Madeline Pettet
Digital Writer at iSelect, Proud EV owner
Why does it cost more to insure an EV?
Even though it’s been a couple of decades since the first electric car rolled off the assembly line, the market for EVs has only recently taken off. Though competition is growing and EV prices are on their way down, EVs remain more expensive to purchase than traditional cars. This is bound to seep into insurance premiums, along with a few other cost factors:
- EVs have more complex components and systems, which can add up in replacement costs.
- Repairing an EV can involve importing parts and the associated cost of shipping.
- The shortage of EV service centres and skilled technicians could mean damaged vehicles need to be transported further.
That said, insurers will typically set their premiums after considering associated risks, the likelihood of you making a claim, and the cost of the potential claim. So, factors like your age, claims history, driving record, where you live, where your car is garaged and how you use it also come into play.
Helpful tip:
Granted, an electric car can cost more to insure than a car with an internal combustion engine. But given that car insurance hasn’t changed drastically to accommodate electric vehicles, it might help to consider some tried and tested ways to save on your EV’s insurance costs. For example, you can consider a pay as you drive policy, opt for a higher excess, or pay your premium annually. Above all, compare quotes from insurers. It’s one of your best chances of finding the policy you need at the price you want to pay.
Adrian Bennett
General Manager for General Insurance
Frequently asked questions
Do I need to buy a separate car insurance policy when I switch to an EV?
If you’re already on a comprehensive car insurance policy, it’s likely that the same kind of policy can cover your electric car. But there may be another insurer out there who may offer better coverage for EVs. That’s why it pays to compare comprehensive car insurance so you’re getting the most you can out of your policy.
Just remember to cancel your previous car insurance policy.
Am I covered if my EV is in driverless mode?
According to Australian law, a human driver must be in control of a vehicle even if it’s autonomous and fully capable of driving itself – which some EVs are. Because of that, there’s a good chance that claims for any ‘driverless’ accidents will be denied by your insurer.
Don’t despair, though, science fiction buffs. The future is closer than you think.
Australia is conducting trials to help develop new federal legislation that would allow autonomous vehicles to roam the country freely. And though you may not be able to use full driverless mode in your EV (yet), you can engage other space-age functions like autosteer, auto park and summon, which enables the car to move small distances without a driver.
What’s covered under my EV’s comprehensive car insurance policy?
A standard comprehensive car insurance policy will cover your electric car the same way it would cover an internal combustion engine vehicle. So, you should ideally be able to get cover for:
- accidental damage caused by a collision, attempted theft, fire or a malicious act
- damage caused by natural disasters such as storms, floods and hail
- replacement keys or locking devices if they are stolen and not recovered.
In addition to this, you might also be able to access additional features and optional extras, such as:
- replacing your car with a new one after a total loss, if you’re within a specified period from manufacture
- zero excess for claims involving only windscreen damage
- choosing your own EV certified repairer
Then, there are the EV-specific scenarios, such as:
- battery fires, including thermal runaway
- other damage or loss to your EV battery
- loss or damage to wall chargers, charging cables and wall mounts.
Bear in mind that coverage can always differ between insurers. If you’re keen on a provider, check the policy’s product disclosure statement (PDS) to be sure of what’s covered and general exclusions.
How can I save on my EV insurance?
Some might say there’s a trade-off between an EV’s notably cheaper running costs and their higher-than-average insurance premiums – try $661 higher per year.5Drive.com.au – Why are electric cars so expensive to insure? But if you’re savvy enough, you might still be able to bring down your insurance costs.
Here are some useful tips to keep in mind:
- Though it might cost you more when you need to make a claim, agreeing to pay a higher excess can lower your premium.
- Speaking of making a claim – if you’re the driver at fault, it could be better to go out-of-pocket for minor damages. Doing this can help build or maintain your no-claim discount.
- Paying your premium annually instead of monthly could reduce your premiums as it can help insurers reduce administrative costs.
- Measures you take to keep your car safe might bode well with insurers and translate to lower premiums. Think a lock-up garage or anti-theft devices like car alarms or immobilisers.
Above all, don’t settle. Remember to shop around and compare quotes. More often than not, doing this betters your chances of getting the best deal you can. To get started, you can compare comprehensive car insurance policies from our range of providers.
How do I pick the right car insurance policy for my EV?
Though similar in most ways to insuring a traditional vehicle, electric car insurance can come with a couple of bits and bobs worth considering. If you’re on the hunt for car insurance for your electric car, look out for:
- insurers with a repairer network capable of handling EVs
- battery cover in case of thermal runaway or damage
- policies that cover damage or loss to EV charging equipment
- government incentives that may apply to the policy.
In addition to this, remember to consider your own needs and budget when picking a policy for your electric car. As always, read the product disclosure statement (PDS) to understand what’s covered under the policy you’re considering.
Ready to choose EV insurance?
Driving an EV can seem like a breath of fresh air for those who want to do their bit to reduce climate change. To others, simply riding the wave of new automotive technologies might be incentive enough. You might also want to stay ahead with your car insurance! Try our online car insurance comparison tool and choose a policy from our range of providers.
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