Introduction: How Much Is Car Insurance for an Electric Car?
As electric vehicles continue to surge in popularity across Australia, many drivers are shifting away from petrol and diesel cars in favour of more sustainable and efficient alternatives. But one key question arises before making the switch — how much is car insurance for an electric car?
Insurance is a crucial aspect of vehicle ownership, and understanding the costs associated with insuring an EV can help you make a more informed decision. The answer to how much is car insurance for an electric car is not a simple number. It depends on the vehicle’s make, value, battery size, driver profile, and insurer policies. While electric cars can be slightly more expensive to insure, they also offer unique benefits and tailored insurance products that may offer added value.
Australians are quickly adopting electric vehicles, thanks to state-based incentives, zero-emission goals, and improved charging networks. But with this transition, comes a new kind of cost structure, particularly in car insurance. So let’s explore in full detail what affects your premiums and how you can optimise your EV insurance costs.
What Is the Average Cost of Electric Car Insurance in Australia?
To directly address the question how much is car insurance for an electric car, it’s important to start with real-world averages. In Australia, insuring an electric vehicle typically costs between 1400 AUD and 2500 AUD per year depending on various factors like car model, insurer, and driver details. This is somewhat higher than the average annual premium for a comparable petrol vehicle, which sits between 1100 AUD and 1800 AUD.
Why is there a higher cost? Electric cars generally have higher upfront values and unique components, particularly the battery system, which can be expensive to repair or replace. The good news is that these costs are gradually stabilising as more insurers enter the EV market and repair infrastructure improves across Australia.
Take, for example, the Tesla Model 3. A full comprehensive insurance policy for this model can cost approximately 2000 AUD per year, depending on your location, driving history, and chosen coverage. In contrast, a more affordable electric model like the MG ZS EV might cost closer to 1450 AUD annually to insure.
The range in pricing reflects not just the car’s value but also how insurers evaluate risk, availability of EV-specific parts, and claims data.
Why Is Electric Car Insurance More Expensive?
When asking how much is car insurance for an electric car, many are surprised to learn that premiums are typically higher than for traditional internal combustion engine (ICE) vehicles. This price difference isn’t random — it’s tied to specific cost and risk factors unique to electric vehicles.
One of the main reasons is the cost of repairs and replacement parts. Electric vehicles use high-voltage lithium-ion batteries that are both costly and sensitive. If these are damaged in an accident, replacing them can cost thousands. Similarly, even minor accidents may require specialised repairs, sometimes only available through certified service centres.
Another contributing factor is the lack of widespread repair networks. Not every mechanic is equipped or certified to work on electric vehicles, which means repairs often need to be handled by manufacturer-specific service centres. This leads to higher labour charges and potentially longer wait times.
In addition, advanced technologies used in EVs, such as regenerative braking systems, digital dashboards, and self-driving hardware, mean more sophisticated (and expensive) repairs when things go wrong.
Even though EVs typically have fewer moving parts and require less maintenance overall, the risk profile for insurers is still higher, resulting in higher premiums. However, as the EV market matures and servicing becomes more accessible, these premiums are expected to balance out.
Key Factors That Influence How Much Is Car Insurance for an Electric Car
Now that we know EV insurance tends to cost more, it’s important to understand what actually goes into calculating that cost. Several key factors determine how much is car insurance for an electric car, and these variables can either raise or lower your premium.
- Vehicle Make and Model: A luxury electric car like a Tesla Model S will always cost more to insure than a smaller model like the BYD Dolphin. That’s because higher-value vehicles tend to cost more to repair and replace.
- Driver Profile: Your age, driving history, and experience behind the wheel all play a role. A 25-year-old with one prior accident will likely pay significantly more than a 40-year-old with a clean record.
- Location: Where you live impacts your premium. Drivers in inner-city areas with higher rates of traffic, theft, or vandalism tend to pay more. For example, premiums in Sydney or Melbourne are often higher than in regional areas like Ballarat or Cairns.
- Annual Kilometres: If you drive your electric car daily for work and clock over 20,000 km a year, you’re statistically more likely to have an accident. Less frequent driving usually results in a lower premium.
- Where You Park: Off-street or locked garage parking helps reduce the risk of theft or vandalism, leading to reduced insurance costs. Parking on the street, especially overnight, may increase your risk profile.
- Policy Options: Comprehensive coverage that includes windscreen protection, roadside assistance, and EV-specific benefits will cost more. You can adjust your premium by modifying these inclusions.
These factors combine to determine how much is car insurance for an electric car, so understanding them is essential when comparing quotes or negotiating with insurers.
How Much Is Car Insurance for an Electric Car Compared to Petrol Cars?
To get a clear view of the financial picture, it’s helpful to compare how much is car insurance for an electric car versus a petrol car. The average petrol car in Australia attracts a premium of around 1200 AUD annually, depending on the vehicle. In comparison, a similar-sized EV may cost anywhere from 1400 to 2500 AUD annually to insure.
The difference is driven primarily by the higher replacement costs and limited repair facilities for electric vehicles. EVs are loaded with advanced technology — from smart displays to semi-autonomous features — that require specialised skills and tools to fix. These elements are factored into insurance risk assessments.
That said, electric cars also come with advantages that petrol vehicles do not. For instance, EVs have lower long-term maintenance costs, reduced wear and tear due to fewer mechanical parts, and no fuel expenses. Over time, these benefits can offset the higher insurance costs.
Additionally, electric vehicles often qualify for government incentives, tax rebates, or registration discounts, which further contribute to their overall affordability despite higher insurance premiums.
So while the initial answer to how much is car insurance for an electric car might be “more than petrol cars,” the total cost of ownership can still be lower or comparable when all factors are taken into account.
EV-Specific Inclusions to Look for in a Policy
When choosing insurance for your EV, it’s not enough to ask how much is car insurance for an electric car — you also need to understand what you’re paying for. Many insurers now offer EV-specific policy features that can provide much better protection and peace of mind.
Some of the most important inclusions to look for in an EV insurance policy include:
- Battery Coverage: This is essential. A battery is the most valuable component of your electric car. Make sure it’s covered for damage due to accidents, fire, and in some cases, water exposure or thermal events.
- Charging Equipment Cover: EVs come with portable charging cables, adapters, and sometimes even home charging stations. These items are often targeted by thieves or may get damaged during storms or accidents, so ensure they are included in your policy.
- Software and Firmware Coverage: As EVs rely heavily on software for operation, look for policies that cover software-related malfunctions, updates gone wrong, or even cybersecurity-related incidents.
- Towing to EV Specialists: If your electric car breaks down, it needs to be towed safely and correctly. Choose a policy that guarantees transport to an authorised EV repairer, not just any nearby mechanic.
These extras can significantly improve the value of your insurance policy and offer protection that standard vehicle policies may not include. While they may slightly increase your premium, the benefits far outweigh the added cost, especially for expensive electric models.
Are There Cheaper Insurance Options for Electric Cars?
Yes, but knowing how much is car insurance for an electric car also involves knowing where to find the best deals. Some insurers now offer EV-exclusive packages with better rates, especially if:
- You drive less than average (low kilometres)
- You install a tracking device or dash cam
- Your EV has high safety ratings or driver-assist features
- You park your car in a locked garage overnight
Comparison sites and direct quotes are your best tools. Providers such as Budget Direct, Youi, NRMA, and RACV now have competitive EV insurance products.
How to Lower the Cost of Electric Car Insurance
While it may seem costly when asking how much is car insurance for an electric car, there are smart ways to cut your premiums:
- Choose Your EV Wisely: Some brands offer cheaper insurance due to better parts availability or repair history.
- Increase Your Excess: Agreeing to pay a higher excess can lower your annual premium.
- Bundle Policies: Many insurers offer multi-policy discounts if you combine home and auto insurance.
- Drive Safely: A no-claim history over multiple years can qualify you for a significant discount.
Will Electric Car Insurance Get Cheaper in the Future?
The answer to how much is car insurance for an electric car in the long term depends on how fast the market adapts. As electric cars become the new norm, repair services will expand, parts will become more available, and competition among insurers will grow — all helping bring premiums down.
Moreover, government incentives encouraging EV adoption may push insurers to create affordable packages to support the national shift toward greener vehicles.
Case Study: Tesla Model 3 vs Hyundai Ioniq 5 vs MG ZS EV
To help understand how much is car insurance for an electric car, let us look at real comparisons between popular EV models in Australia.
| Model | Average Annual Premium (AUD) |
|---|---|
| Tesla Model 3 | 2100 |
| Hyundai Ioniq 5 | 1900 |
| MG ZS EV | 1450 |
These prices are based on a 35-year-old male driver in Sydney with no prior claims and full comprehensive coverage. Rates vary depending on exact conditions, but it gives a clear idea of how vehicle type affects pricing.
Insurance for Used vs New Electric Cars
If you’re exploring second-hand EVs, you might ask how much is car insurance for an electric car that is not brand new. Used EVs are generally cheaper to insure because their market value is lower. However, insurers may also factor in higher repair likelihood due to aging components or reduced battery range.
Always compare policy features, and check if the battery lease (if applicable) is included in your policy. Some older models may require specific clauses in the contract.
Additional Costs That May Affect Premiums
Aside from the car itself, other costs can influence how much is car insurance for an electric car. These include:
- Replacement Vehicle Cover: Some EV policies include an electric courtesy car.
- Glass Replacement: Large panoramic EV windshields are expensive to replace.
- Modifications: Adding solar panels or aftermarket chargers can increase premiums.
- Ride-sharing: Using your EV for Uber or delivery can affect your policy type and price.
FAQs About How Much Is Car Insurance for an Electric Car
Q1: Is electric car insurance mandatory in Australia?
Yes, just like any other car, electric vehicles must have compulsory third-party (CTP) insurance. Most drivers opt for comprehensive policies for better protection.
Q2: Does the battery get full coverage under all EV insurance policies?
Not always. Some insurers treat the battery as a separate component. Always check whether accidental or fire damage to the battery is covered.
Q3: Is insurance cheaper for plug-in hybrids compared to full EVs?
Generally, yes. Plug-in hybrids are often cheaper to insure due to lower battery costs and simpler technology compared to full EVs.
Q4: Can I reduce my EV insurance cost with pay-as-you-drive policies?
Yes, if you are a low mileage driver, usage-based policies can save you a lot. These are ideal for EVs often driven shorter distances.
Q5: Will having an at-home charging station affect my insurance?
Some insurers consider home chargers as an added risk (especially for fire), while others offer discounts if it reduces your reliance on public stations. Always disclose this when applying.
