The EV Insider

Guide

Why is EV insurance more expensive in Australia?

Last checked: 23 October 2026 · 5 min read · By The EV Insider

Short answer: on average, Australian EV owners pay more for comprehensive cover. CHOICE reports an average EV premium of A$2,545, compared with A$1,702 for petrol cars (CHOICE, page undated, checked 23 October 2026). CHOICE doesn't say when its data was collected. In Compare the Market's March 2026 index, ten popular EVs averaged A$2,306 for one driver profile (Compare the Market, 9 April 2026). Part of that is simply that EVs cost more to buy. The rest comes from expensive batteries that can turn a minor crash into a write-off, imported parts, costly driver-assist sensors and a shortage of qualified EV repairers. Insurers price these risks differently, which is why quotes for the same EV can be hundreds of dollars apart.

General information only, not insurance advice. We don't recommend any insurer and don't earn anything from insurance.

General information, not tax advice. Rules change and your circumstances differ. Check the ATO sources linked here and speak to a registered tax agent or your employer's payroll team before you decide.

How much more EV owners pay

Finding Figure Source
Average EV premium vs petrol A$2,545 vs A$1,702 (about 40% or A$843 more) CHOICE (undated)
New EV vs new petrol car Nearly 30% (A$575) more CHOICE (undated)
1- to 4-year-old EVs vs petrol of the same age 22–27% more CHOICE (undated)
Electric vs petrol Hyundai Kona, same spec Petrol 24% cheaper Canstar
EV vs comparable petrol car, three insurers +0% to +39% Taylor Fry, 28 April 2026

CHOICE's figures compare average premiums across about 16,000 EVs and 36,000 petrol and diesel cars, as described by Taylor Fry. Canstar used standardised driver details and a target excess of A$1,000, and said the gap was largely due to the electric model's higher purchase price. CHOICE's page is undated and doesn't say when the data was collected. These studies use different methods, so treat them as a guide to direction rather than a quote for you.

Reason 1: the battery

The battery is the most expensive single part of an EV.

That matters for owners as well as insurers. A write-off pays out the car's market or agreed value, which may be less than you owe on finance. See novated lease car insurance and gap cover.

Reason 2: parts and repairers

Reason 3: sensors and driver-assist tech

Modern EVs come with cameras, radar and driver-assist systems (ADAS). These are good for safety, but a bumper repair can also mean replacing and recalibrating sensors. The ICA's 2025 policy paper names ADAS recalibration as a significant driver of higher repair costs across all modern cars, including EVs (ICA Motor Insurance Policy Paper, March 2025). Youi says the same on its EV page: rain sensors, cameras and collision avoidance "can be pricey to repair or recalibrate" (Youi, checked 22 October 2026).

Reason 4: the model and brand

Insurers price by make and model, so brand matters. In Compare the Market's March 2026 index, average quotes ranged from A$1,524 (MG4 Excite 51) to A$3,356 (Tesla Model 3 RWD) for the same driver profile (Compare the Market, 9 April 2026). Taylor Fry adds that new brands have "little local claims history", so insurers are still working out pricing (Taylor Fry). Model-by-model figures are in EV insurance costs compared.

Why quotes for the same EV vary so much

Taylor Fry found wider price spreads for EVs. For a BYD Atto 3, the cheapest and dearest of three insurers were A$900 apart. For a petrol Mazda CX-30 the spread was A$500 (Taylor Fry, 28 April 2026). Each insurer has different claims data, repair networks and appetite for EVs, so their prices differ more. Canstar's 2026 research found drivers could save A$651 on average by switching to a 5-star-rated policy, across all car types (Canstar, 28 May 2026).

The practical upshot: get several quotes, and make sure they're for the same cover. Our checklist for comparing EV insurance quotes shows how.

Will it get cheaper?

Possibly. CHOICE expects repair costs to fall as Australia's EV parts and repair networks develop, and notes EVs have far fewer moving parts (CHOICE). Taylor Fry says average EV claims costs "should moderate" as the repair ecosystem matures, though "the pace of this development is highly uncertain" (Taylor Fry). So far the published numbers haven't fallen overall. Compare the Market's average EV quote rose 10% between March 2025 and March 2026, though the MG4 Excite 51 fell 4% and the BYD Sealion 7 was almost unchanged (Compare the Market, 9 April 2026).

Bottom line

EVs cost more to insure mainly because of what happens after a crash: battery risk, imported parts, sensors and a thin repair network. Insurers disagree on how to price those risks, so shopping around pays off more for EVs than for most cars. If your EV is on a novated lease, check the write-off and gap cover too.

FAQ

Is EV insurance a different type of policy?

Usually not. CHOICE notes that most Australian insurers cover EVs under the same policies as petrol cars, with a few adding EV-specific inclusions (CHOICE).

Is battery wear covered?

Generally no. Insurers cover battery damage from an insured event (crash, fire, storm, theft), not gradual degradation or breakdown (RACV).

Are EVs more likely to catch fire?

That isn't what drives the premium gap. Insurers cite repair cost and battery value. Some policies say outright that battery fire (thermal runaway) is covered under fire (Allianz).

Disclaimer: this is general information only, not insurance or financial advice. Published figures come from surveys with specific driver profiles and dates, and aren't quotes. Read the PDS before buying any policy. We don't receive any payment from insurers. See our About page.

Get The EV Insider newsletter

Plain-English EV costs, rules and deals for Australians, with sources. Free, no spam.

Sources

Last checked: 23 October 2026. General information only, not tax, financial, legal or credit advice. We don’t recommend any provider; where businesses are named, it’s for information. See our affiliate disclosure.