Navigating Electric Vehicle Insurance: What New EV Owners Need to Know

According to the Electric Vehicle Council, there are around 180,000 EVs currently driven in Australia, with Telsa, BYD, MG, and Hyundai being some of the most popular brands.

Thanks, in part, to an increasing desire to save money on petrol and reduce their carbon footprint, more and more people Down Under are making the switch from internal combustion engine vehicles to hybrid or fully electric models.

Indeed, Drive.com.au recently revealed that 20,556 electrified cars were sold in January 2025, which means a lot of Aussies are looking to purchase electric vehicle insurance for the first time.

If you find yourself in this boat – or car as the case might be – we’ve put together this guide that breaks down everything you need to know about electric vehicle insurance.

Hopefully it will help you find the right policy for your needs.

Why Is Electric Vehicle Insurance Different to Regular Cars?

While most popular insurers, including Rollin’, Youi, Budget Direct, NRMA, and AAMI, all offer electric vehicle insurance, their policies tend to be a little bit different from the ones they offer for regular cars.
In fact, you might find that most EV policies have a higher initial cost, than ICE vehicles, partly due to the fact they require specialist parts, which can be more expensive to repair or replace in the event of an accident.

You should be aware that the battery is one of the most expensive components of an EV, and its coverage varies markedly between insurers. (Although, hopefully, this might change as more people purchase electric vehicles).

Additionally, EVs are perceived as potentially posing unique risks, such as fire hazards related to battery malfunctions or issues associated with charging points, which have a bearing on the overall cost of your policy.

Coverage Options for EVs

Back in 2008, the Blade Electron was the first EV to be launched in Australia. However, it wasn’t until the Mitsubishi i-MiEV came out in 2011 and the hybrid Toyota Prius C a year later that the vehicle category really started to establish itself in the country.

At that time, insurance companies were wary about what they offered as coverage to car owners, and they have been constantly modifying their policies since then.
Today, many insurers now offer EV-specific policies, which can include the following:

1. Comprehensive Cover

This is the highest level of protection and covers both damage to your vehicle and third-party liabilities.
As new electric vehicles can be quite expensive for owners, comprehensive insurance is often recommended as their best choice.

2. Battery Protection

Since the battery is the most expensive part of an EV, some insurers offer specific battery coverage, which ensures you are protected against theft, damage, or malfunction.

It is a good idea to check whether your policy includes battery replacement or repair. But you should also be aware that some manufacturers offer free battery replacements if their performance level drops below a certain level, and the vehicle is still under warranty.

So, you might want to check with them before committing to any given insurance policy.

3. Charging Cable and Station Coverage

Most insurers now offer cover for charging cables and home charging stations, which protects against damage, theft, or accidents related to your charging equipment.

Talking of which, here are some tips on how to safely charge your vehicle at home.

4. Roadside Assistance

Breakdowns can be more complicated with electric vehicles, especially if your battery runs out of charge mid-journey or you are in a remote area at the time.

Some policies include EV-specific breakdown cover as standard, which comes with mobile charging assistance. But not all do, so it’s good to shop around.

5. Fire and Water Damage Protection

EVs have lithium-ion batteries that can be sensitive to extreme conditions. Some policies provide coverage for fire and water damage, but many don’t.
So, again, you might want to find one that does.

Factors That Influence EV Insurance Costs

When looking for suitable EV insurance, there are several factors that might affect the price you are quoted.

The vehicle type and model are one of the most obvious ones because high-end EVs like Tesla Model Y tend to have higher premiums due to their expensive parts and repair costs, while more affordable models, such as the MG ZS EV or Hyundai Kona Electric, generally have lower insurance costs.

Additionally, cars with larger batteries and extended ranges can be more expensive to replace, which might affect the overall insurance premium, while traditional factors like your driving history, predicted mileage, and where you will park the vehicle are also factors.

Key Considerations

Before taking out EV insurance with a specific company, there are several things you should consider.

For a start, it is imperative to ensure the policy covers essential EV-specific risks, such as battery damage, charging cables, and fire hazards. That is why you should carefully read the fine print of the product disclosure statement to fully understand what you are and are not covered for.

It is also a good idea to select a policy from a company that has a good reputation for customer service and an efficient claims process, even if their premiums are a little higher than others

Additionally, for your own peace of mind, you should ensure the policy includes EV roadside assistance, particularly for battery-related breakdowns.