Insuring an Electric Vehicle: What You Need to Know

An insurance policy is a mandatory requirement for every car owner in Australia, regardless if they own an ICE car or an electric car.

The most basic requirement is a compulsory third-party insurance plan, or CTP insurance for short. This insurance policy covers personal injuries made to another person involved in an accident. Its coverage doesn’t vary much based on its underlying car class.

That said, most car owners would say that getting comprehensive car insurance is a superior choice as it allows car owners to file claims for damages from a wider range of incidents.

Furthermore, comprehensive car insurance also allows you to access EV-specific benefits and savings. This can help you stay financially resilient even during down moments.

If you’re curious about the specifics of EV-specific coverage policies, keep reading. This article will cover everything you need to know about getting an insurance policy for an electric vehicle.

The Costs of a Comprehensive EV Insurance Policy

Here’s a fact: The cost of insuring an electric vehicle is higher than it is to insure a petrol car.

This is only natural. The adoption of electric cars into the mainstream has been a relatively new phenomenon. And even as its numbers are steadily rising, it’s nowhere near the top of the food chain in terms of pure numbers—that ranking goes to petrol cars.

This new and sudden rise to the top means that infrastructure surrounding electric vehicles are still relatively unexplored. Car replacement parts are not as ubiquitous. Specialized EV technicians are hard to come by too.

What that means is that getting a broken electric vehicle back to working condition takes a lot more effort and technical know-how than it does to fix a broken ICE car.

While there has been an expansion of infrastructure and initiatives by government units to incite the growth of electric cars, the sheer popularity of ICE cars seems to hold strong for the time being.

This will mean that EVs and EV-adjacent resources like EV insurance will remain pricier in comparison. According to 2024 findings, electric cars cost about 50% more to insure than petrol equivalents. This is equivalent to an extra $600-700 annually.

A more specific example would be this: a Tesla Model Y RWD would cost $3435 to insure annually and an MG 4 Excite 51 would cost $1470 to insure annually. In comparison, ICE cars would cost somewhere between $1371 to $1745 to insure annually.

In terms of pure mean averages, EVs are by far more expensive to insure. That said, this will also depend on the model that you’re pitting together, as there may be some EVs that don’t cost too much to insure when compared against traditional ICE cars.

What a Comprehensive EV Insurance Policy Covers

The coverage of a comprehensive EV insurance policy, as the name suggests, is much more than the coverage of a compulsory insurance policy.

While it may demand higher annual premiums, it’s often the superior choice because it allows car owners to claim a payout for a wider range of incidents.

Here are the key areas that this insurance policy covers:

Vehicle damage from collision, regardless of who’s at fault
Fire and explosions
Vandalism, theft, and attempted criminal activities
Natural disasters, such as floods, storms, wildfires, and hail
Liability coverage that covers the cost of injuries
Personal injury protection for personal (and passenger) injuries
Uninsured and underinsured motorist coverage
Roadside assistance
Rental reimbursement for rental cars

Most comprehensive auto insurances for electric vehicles (and many standard vehicles, for that matter) offer the aforementioned coverage options. That said, be sure to clarify the extent of your coverage with your insurer to ensure you’re signing a contract without any unexpected surprises.

If you find yourself in the middle of an accident that applies to you, in most cases, you may file and claim an insurance payout.

However, if you demonstrated certain behaviours that make it evident that you were not in the right frame of mind to drive at the time of the accident, then you will be denied any payout.

This includes driving under the influence, driving without a license, intentionally damaging an object or car, neglecting to maintain a broken vehicle, and using the car for illegal activities.

Difference to Regular Comprehensive Car Insurance

A comprehensive car insurance for your EV has a few additional add-ons to account for, considering the unique driving mechanism of the vehicle.

These additional add-ons include the following:

Special roadside assistance: Roadside assistance brings you a mobile charging port, EV-specific tyres, and a towing service that lifts the vehicle from the ground and onto a transportation vehicle’s platform.
Battery coverage: Insurance covers the cost of repairing or replacing the car’s battery. It may also extend the warranty of this component.
Plug and charging equipment coverage: Insurance covers any charging-related equipment of the vehicle, from the home charger port to the adapters.

Given the extra coverage packages, it’s naturally the case for EV car insurance to demand higher premiums. However, there are also incentives to getting an EV policy, so it could cancel out if you’re able to find good discounts and deals for it.

How to Insure an Electric Vehicle: Step-by-Step Guide

So you just bought an electric vehicle in Australia and want to insure it. What steps should you take next?

Well, here’s what you should do.

1. Research and compare insurance providers: Identify insurers that offer EV policies, then vet them according to their reputation, customer service, value, and your own set of criteria.
2. Ask around and compare quotes: Gather quotes for their EV insurance package. Look at the offering in its entirety—not just the cost.
3. Negotiate for discounts: Leverage habits like low mileage or a clean driving record to lower your monthly premiums, if possible.
4. Check coverage for EV-specific parts: Ensure that your insurance policy covers high-cost EV components like the battery and charging station.
5. Pick an insurer: Select a provider after making a thorough assessment for each.
6. Fill in application details: Tell the insurer details about yourself and your car. Submit registration and identification details.
7. Submit your application and wait: Wait a couple of days for word on your approval, revision request, or rejection.
8. Once approved, set up monthly payments: Set up automatic payments to ensure that your EV is always protected.

By following these steps, you’ll be able to get an electric vehicle insured in under no time. It’s essential to have it done before you drive the vehicle.

If you want to speed up the process, you can always ask your attending car salesman to help you go through the application. They’ve done it hundreds of times in the past—so they’re sure to be equipped with the knowledge to help you out.

3 Saving Tips for Your EV Car Insurance Policy

Considering the higher-than-average price of an EV car, it’s in your best interest to find ways to bring the costs down.

Here are three quick saving tips to help you out.

1. Bundle Your EV Insurance With Other Policies

Lumping your EV insurance with other insurance policies, such as home insurance, is a great way to lower the cost of your total insurance policies.

Many insurers are happy to give you a discounted rate if you have multiple policies with them. It’s a win-win, as you’ll also be saving a bit more by sticking with one insurer for your protection needs.

2. Practice Safe Driving Habits

During your application, insurance providers will scrutinize your profile heavily. They want to ensure that you’re not a risky individual for their sake.

As such, before even signing up for an insurance policy, be sure to have a clean track record whilst on the road. Turn on the telematic system in your electric vehicle to track your driving patterns. Use the results as proof to show insurers that you’re a safe driver.

If you demonstrate safe driving abilities, your insurer will give you a lower rate than usual.