EV car insurance

Electric vehicles (EVs) are on the rise in Australia, thanks to better technology, a push for greener options and rising petrol prices leading people to explore alternatives.

While getting one might still seem like a big step because of their prices and the car insurance that comes with them, understanding how EV car insurance works can make a big difference. Here’s a quick guide to what you need to know about insuring your electric ride.

At its core, EV insurance isn't much different from the traditional car insurance we're all used to. It offers the same protection against the usual suspects: accidents, theft, and damage. However, it's pretty clear that electric vehicles have a unique set of needs. For instance, with an EV you may want cover for potential damage to the high-voltage electrical system, such as malfunctions in the charging infrastructure, which are not concerns for traditional petrol cars.

Despite these differences, insurers haven't been in a hurry to reinvent the wheel. Insead, most simply modify their existing policies to cover EVs. This means that EV owners are largely being sold standard car insurance policies with some EV-specific tweaks sprinkled throughout. 

In fact, it wasn't until 2024 that we saw a significant shift in the market. That’s when insurance disruptor KOBA launched Australia's first car insurance policy designed exclusively for electric vehicle owners.

So, while EV insurance remains very similar to traditional car insurance—close enough that standard policies can still suffice—it's evident that the unique nature of electric vehicles is starting to be recognised. That means we can expect to see more innovations in the realm of EV insurance as time goes on.

Given the limited number of EV-specific policies currently available, you may wonder whether standard car insurance adequately covers an electric vehicle. Generally, the answer is yes; car insurance is designed to protect against major issues like accidents, theft and damage, no matter if your ride is powered by gas or electricity.

But, with EVs being a bit different under the hood, here are a few things you might want to double-check:

• Choosing your own repairer. Since not all mechanics are up to speed on electric vehicles, having the option to pick a shop that knows EVs inside out can save you a headache later.
• Loaner car. If you need to send your car in for repairs, it's nice to know if you can get an EV as a loaner car. That way, you're not stuck filling up at the gas station when you're used to just plugging in at night.
• Charging station. Got a charging setup at home? Check if your policy covers it in case of damage or theft.
• Roadside assistance. If your EV runs out of juice or has another issue while you're out, make sure your insurance's roadside assistance can handle EV-specific needs.

While standard car insurance does the job for most things, taking a quick look at these points can help make sure your EV gets the right coverage. The world of EVs is still a bit new to some insurance companies, so it doesn't hurt to ask a few questions and get everything squared away.

Generally speaking, EVs do cost more to insure, all else being equal. The reason behind this isn't just about the vehicles themselves but a combination of factors related to the market and how insurance providers assess risk.

Here are the major reasons for the higher premiums:

• Higher purchase cost. The initial cost to buy an electric vehicle is typically higher than that of petrol or diesel cars.
• Rarity and supply chain issues. Electric vehicles are still rare, with underdeveloped supply chains making both the vehicles and their parts harder to find. This impacts the overall availability and can escalate repair costs.
• Limited repair specialists. There are fewer mechanics trained to work on electric vehicles, which can lead to higher service charges due to the specialised nature of the work.
• Unfamiliar risks. Insurers face uncertainty with EVs due to unfamiliar risks and potential repair complexities, contributing to higher premiums.

As the supply chain for EV parts and models matures, insurance prices will almost certainly  drop long-term. But for now, EV car owners will have to deal with higher premiums in general.

Despite the bigger bill, there are ways you could lower car insurance costs for your electric vehicle.

• Opt for a higher excess. Opting for a higher excess could reduce your car insurance premiums. Just be aware that when claim time does come around, you’ll have to pay more out of pocket.
• Shop around. Comparing car insurance quotes seems like a no-brainer, but you’d be surprised at how many customers buy the first policy they read. Head over to our car insurance comparison hub to get started.
• Drive safely. If you can prove you’re a reliable driver, car insurance providers will often offer a “no claims discount” to reward your safe driving.
• Bundle your insurance coverage. Taking out multiple policies from the same provider, such as car and home insurance, could net you good savings.
• Drive less. EVs particularly suit city drivers who may only need to go limited distances. This reduces the amount of time on the road (as well as how often you need to recharge), which reduces your overall risk in the eyes of the provider. Pay-as-you-go car insurance policies often offer special discounts to drivers who only range between 1,000-15,000km per year.

If you’re looking for more inspiration on how to keep car costs down, check out our complete guide to cheap car insurance.

Ultimately, the best car for an individual person will depend on their needs, budget, and circumstances. However, there are enormous cost benefits to owning an electric vehicle, let alone the benefits to the environment.

According to the Electric Vehicle Council (EVC), the average petrol car costs about $14 per 100km, while the average EV only costs $4 per 100km. That's an almost 75% difference in price!

Customers with solar panels installed in their homes could find the cost of their recharges virtually free if they charge during daylight. Complimentary recharge stations at some grocery stores also makes it fairly easy to stay on the go.

Meanwhile, the simplicity of EV engines compared to internal combustion engines (20 parts vs. over 2,000) means repairs are both far less likely to happen and far simpler to execute in practice, even if parts may take a while to get here.

Looking forward to the future, EVs present a promising alternative to petrol cars. As demand, knowledge, and infrastructure around them grows, drivers could be rewarded for their eco-friendly purchase.

If you don’t want to insure your vehicle, but want to be covered in case you damage someone else's car or property, then third-party cover can save you some money. In fact, since it doesn’t take into account the unique needs of your car, it shouldn’t cost any more than any other third-party policy, generally speaking.

But since we’re talking about a high-end vehicle, it’s probably not a wise move to leave your car unprotected. Therefore, comprehensive is definitely the way to go.

In Australia, you'll find that nearly every insurance company is ready to cover electric vehicles (EVs). However, the details of what each policy includes can differ. Some insurers, for example, might not offer coverage for Tesla vehicles, due to the specific challenges related to their repair and service needs, such as the limited number of Tesla dealerships across the country.

If you encounter difficulties in securing insurance for your electric vehicle through general insurers, the Insurance Council of Australia provides a helpful Find an Insurer service. This tool can guide you towards companies that are equipped to insure EVs.

Additionally, to explore your options further, feel free to check out our comprehensive list of policies below.