When it comes to buying a new car, more and more Australians are choosing to go electric.1 If you’re considering making the switch, you might have questions about electric car insurance and how it compares to insurance for petrol or diesel cars.
Electric car insurance typically relates to any car insurance policy that covers electric vehicles (EVs) rather than only EV-specific policies, but it is helpful to understand how cover for EVs might differ from cover for petrol or diesel cars and how much insurance premiums for an EV might cost.
Between 1 April 2024 and 30 June 2024, battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) made up close to 10% of new vehicle sales in Australia. Once you include hybrid cars – vehicles where the battery is recharged by the engine and not an external source – that figure jumps to almost 25%.1
According to the Electric Vehicle Council (EVC), Australia currently has more electric vehicles on the roads than ever before.2
“With the continued expansion of charging networks and supply of a broader range of EV models to the market, including utes and other traditionally challenging segments, uptake of EVs is expected to accelerate even further in coming years,” says Natalie Thompson, Senior Manager of Policy at EVC.
EVs are also picking up motoring awards, with Kia’s EV9 Air named the 2024 Drive Car of the Year,3 while half of the eight finalists in the 2023 News Corp Car of the Year were fully electric.4
In this article, we answer six of the most common questions about EVs and electric car insurance, helping you make informed decisions about the type of cover you might need.
1. What can go wrong with an electric vehicle?
Look under the bonnet of an EV, and you’ll find the mechanical engineering and engine design is vastly different from a petrol or diesel car.
And, with technology such as electric car batteries and charging cables still relatively new to Australian drivers, you might be unfamiliar with the types of issues that EV owners may experience.
While there’s no need for oil changes or spark plugs in your EV, routine servicing is still required. Servicing maintains parts and systems such as brake fluid and pads, suspension components, battery management system (BMS) software, tyres and cooling fans and fluid.5
“There are a lot fewer moving parts in an electric motor, which means there are less things that might go wrong,” says motoring journalist and EV transition specialist Bryce Gaton.
However, as with all cars, unexpected things can occur. With EVs, Gaton explains, this might mean battery failure, software malfunction or even running out of charge.
“Any software issues can often be rectified quickly and remotely by the manufacturer,” he says.
“In terms of running out of charge, most EVs will give you plenty of warning. For example, the GWM Ora displays a warning when you have 25% battery life left, which gives the driver plenty of time to find a charging station.”
Aussie drivers may also have concerns about the safety of electric car batteries and, specifically, their potential fire risk. According to EV FireSafe, which keeps a database of verifiable worldwide battery fires in passenger EVs, the incidence of battery fires remains rare, with just 511 reported worldwide from 2010 to June 2024.6
While authoritative local data on the reliability of EVs isn’t available just yet, data from the UK shows BEVs are nearly 60% less likely to require a breakdown call-out than equivalent-age vehicles with a conventional internal combustion engine (ICE).7
According to the EVC, EVs sold are projected to have a life of about 15 years, or equivalent in terms of total kilometres driven. After this, batteries could have a second life of 10 or more years as energy storage for homes or buildings before being recycled and made into a new battery.8
2. What does electric car insurance cover?
The process involved in insuring an electric car is generally comparable to insuring a traditional vehicle.
As with any vehicle insurance, what is covered under your policy will depend on the type of policy you choose. Most insurance companies provide three types of car insurance policies: comprehensive car insurance, third party property only and third party fire and theft.
When deciding what type of insurance will suit you, Moneysmart suggests considering whether you could manage without your car if it were stolen or written off as a total loss. You may also want to think about whether you can afford to cover the cost of damage to another person’s car if you have an accident.9
“Remember that insurance doesn’t cover breakdowns,” says Marni Jackson, Youi’s Head of Product for Vehicle, Lifestyle and Leisure.
“Car insurance will only cover insured events such as fire, theft and accidents.”
To help you understand exactly what is covered under your insurance policy, always check the Product Disclosure Statement (PDS), including any exclusions.
It might also be a good idea to familiarise yourself with some of the language used by insurers. To help make things a little easier to understand, you might want to check out our glossary of car insurance terms.
3. How does electric car insurance coverage differ from ordinary car insurance?
Put simply, it doesn’t. However, as with any vehicle insurance, several personal factors will determine whether an insurance provider will provide you with a policy and what your insurance premium will be.
These factors might include your age, where you live, your driving history, your car’s value, where your car is typically parked and how often it is driven.
4. Is electric car insurance expensive?
The federal government’s National Electric Vehicle Strategy named perceived upfront costs as one of the main deterrents for Aussie motorists when it comes to making the switch to an EV.10
But, with brands such as BYD, MG and GWM now offering an affordable entry point for Australian drivers, EV ownership is surging.2 So, how much should you expect to pay for electric car insurance, and will it be more expensive than insuring a petrol or diesel car?
“It’s important to remember that it’s not just the fuel type that will determine your insurance premium,” says Jackson.
There are a couple of specific factors that might contribute to the cost of your electric car insurance.
“The first one is the battery, which, if damaged in an accident, can be costly to replace,” Jackson explains.
“The other – and this isn’t unique to EVs – is a high level of tech and ADAS (Advanced Driver Assistance Systems) features, such as cameras and sensors, which are typically built into electric cars. This technology can be costly to repair and recalibrate and is located in areas that are susceptible to damage in an incident – such as the bumper, wing mirrors and windscreen.”
Your electric car insurance quote will generally take into account how expensive your car would be to repair if it were damaged or how much it would cost to replace if it were considered a total loss.
Youi’s car insurance by make and model tool could help give you a better understanding of car insurance options for your particular vehicle, including any EVs you’re thinking of purchasing.
We’ve run the numbers showing the average annual Comprehensive car insurance premium for June 2024’s top-selling electric and ICE cars in three popular categories.11
Small passenger vehicle (over $40K)
EV: MG4 $1,332
ICE: Audi A3 $1,448
Medium passenger vehicle (under $60K)
EV: BYD Seal $1,338-$2,723
ICE: Toyota Camry $1,388
Medium SUV (over $60K)
EV: Tesla Model Y $2,478
ICE: Lexus NX250 $1,457
Please note displayed premiums are estimates only and correct at time of publication. They will vary according to personal circumstances and different insurers’ rating and underwriting.12
Australia's favourite electric cars*
Tap the hotspots below to see how each car ranked.
*As of July 2024. Source: Drive, Best-selling electric cars in Australia during the first half of 2024, July 2024
5. What happens if my EV breaks down?
Sometimes unexpected things happen while you’re on the road, including flat tyres, locking your keys in the car, breakdowns and, in the case of an electric car, running out of charge.
In this case, roadside assistance can be helpful in getting you back on your way as quickly as possible. Youi’s Comprehensive car insurance13 includes 24/7 roadside assistance. For EVs, this means a tow to the nearest charging station or nearest place of safety (you may be required to pay a charging station fee).14
Youi Roadside Assist for an electric car
“The roadside assistance offered with our Comprehensive car insurance is largely the same across fuel types,” explains Jackson.14
“The main difference is with keys locked in your car. Depending on the EV, this may be able to be resolved digitally by the manufacturer.”
If you're locked out, Youi's Roadside Assist can help you get into your car to retrieve your key, or we can arrange for a spare key to be delivered.
6. So, is an EV worth it?
Whether an electric car is the right choice for you will depend on your personal circumstances, but Thompson says it’s important to remember the money you might save on fuel is just one thing to consider.
“Beyond economic benefits from significant operational cost savings, the environmental and social advantages of EVs are significant – reduced lifecycle emissions, less air pollution, and health benefits as a result,” she adds.
“There’s also the convenience factor, particularly if you can charge at home, which is the case for the vast majority of EV owners today.”
It’s also worth finding out what subsidies, rebates and stamp duty discounts might be available where you live. These vary by state and territory and are frequently updated, so check with the relevant government department to see what you may be eligible for.
As with all vehicles, if you are thinking about purchasing an EV, it pays to consider your lifestyle and budget and factor in any ongoing costs such as servicing, batteries and electric car insurance.
1 Source: Australian Automobile Association – Electric Vehicle Index, August 2024
2 Source: Electric Vehicle Council – Australia on track to break annual electric vehicle sales milestone, August 2024
3 Source: Drive – The future of Australian family motoring has arrived! Congratulations to the winner of Drive Car of the Year 2024, the Kia EV9 Air.
4 Source: news.com.au – 2023 News Corp Australia Car of the Year finalist revealed, December 2023
5 Source: WhichCar – Electric car servicing explained: What do EVs cost to maintain?, September 2023
6 Source: EV FireSafe – Latest global EV battery fire data
7 Source: The Driven – The data is in: EVs far less likely to break down than ICE cars, March 2024
8 Source: Electric Vehicle Council – Do electric vehicle batteries degrade over time?
9 Source: Moneysmart – Choosing car insurance
10 Source: Australian Government – National Electric Vehicle Strategy
11 Source: Drive – Australian new-car sales in June 2024: Market hits the brakes after 14 months of VFACTS growth, July 2024
12 Please note these displayed premiums are estimates only and will vary according to personal circumstances and different insurers’ rating & underwriting. The information is based on Youi internal data for Comprehensive car insurance policies sold for the make and model between 10 Nov 2023 and 10 May 2024. 80% of applicable Comprehensive car premiums purchased by our customers fell within or below the indicative premium range shown. Average comparisons are calculated on models where Youi data is available on at least 10 sold Comprehensive policies for that model.
13 Exclusions, limits and additional fees may apply. See our Car PDS for full details.
14 See our Roadside Assist T&Cs for full details.
