The cost of insuring electric vehicles

As prices continue to drop and the variety of models keeps increasing, electric vehicles (EVs) are looking more and more attractive – especially with a potential fuel crisis looming. But what other costs are involved in owning an electric car? 

Our insurance experts delved into our extensive car insurance database to look into the cost of insuring electric vehicles and hybrids. 

We reveal how much you may need to budget to protect your car. 

• How much does it cost to insure an electric vehicle?
• How much does it cost to insure a hybrid vehicle?
• What’s the cheapest EV to insure?
• What’s the cheapest hybrid to insure?
• Why is it more expensive to insure an electric car?
• Is electric vehicle insurance different?

How much does it cost to insure an electric vehicle?

Electric vehicle owners in Australia pay more for insurance. The average premium for an electric vehicle is $2545, whereas the average premium for a petrol vehicle is $1702. Electric vehicle owners pay around 40% or $843 per year more than petrol car owners.

That’s not just because electric vehicles tend to be newer and more expensive. Comparing average premiums for cars of the same age shows that owners of new electric vehicles pay nearly 30%, or $575, more for a year of insurance than owners of new petrol cars. 

This gap persists for older vehicles too, if you look at the average price to insure a 1-year-old electric car compared with a 1-year-old petrol car, the price difference is still staggering: $2458 for an EV compared with $1949 for a petrol car. Owners of 1- to 4-year-old electric vehicles overall pay 22–27% more for insurance than owners of petrol cars of the same age.

How much does it cost to insure a hybrid vehicle?

The average cost to ensure a new hybrid is $2005. The average premium for a new petrol car is $1865, so hybrids are a little more expensive to insure than petrol cars, but not as expensive as EVs.

Comparing prices for cars of the same age, hybrids are roughly 10–20% more expensive to insure than petrol cars.

What’s the cheapest EV brand to insure?

Geely are the cheapest EVs to insure, with an average cost of $1622 for a new car, and Tesla the most expensive, at an average cost of $2985. 

The price to insure any vehicle varies according to many factors, and EVs are no exception. The car brand alone plays a big role due to things like the price tier of the brand, the availability and price of spare parts and service centres, and even the rate of theft and presence of safety features. 

Click through the infographic below to find roughly how much it should cost to ensure your EV, or an EV you’re considering.

What’s the cheapest hybrid vehicle brand to insure?

MG hybrids are the cheapest to insure at an average price of $1463 for a new car. A new Lexus is the most expensive on average at $3400.

Scroll through the infographic to see how average premiums vary by brand and vehicle age.

Why is it more expensive to insure an electric car?

The parts network in Australia isn’t as well established for EVs as it is for combustion engines, so you’re more likely to have parts imported from overseas to repair your car. On top of that, there’s not as many trained EV technicians in Australia yet, so the labour for repairs is higher. All of this feeds through to car insurance premiums.

On the plus side though, as the networks develop in Australia, repair costs should come down. EVs are estimated to have 20 moving parts compared to over 2000 for a combustion vehicle, so they are less likely to require repairs. And of course, there’s the savings on fuel costs to consider.

Is electric vehicle insurance different?

While brands like Tesla sell their own insurance, Australian insurers don’t generally sell separate EV policies. Instead, EVs and hybrids are covered under the same policies as petrol cars and other vehicles with internal combustion engines. 

Most insurers don’t specify any difference in cover between EVs and petrol cars. Although a couple of insurers have EV-specific inclusions. Kogan and Allianz specify that wall chargers and charging cables are included in the value of, and insured with, your car, while Allianz also points out that battery thermal runaway (when the internal temperature of a battery rapidly increases in a self-sustaining way, potentially leading to fire or explosion) is covered under fire incidents. 

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Jane Bardell

Jane Bardell is a Content producer in the Insurance and utilities team. She writes about home, car, pet and health insurance. Previously at CHOICE, she checked facts, figures and statistics as a Verifier with the Editorial and investigations team. Jane has a Bachelor of Science from the University of New South Wales.  Find Jane on LinkedIn.

Jane Bardell is a Content producer in the Insurance and utilities team. She writes about home, car, pet and health insurance. Previously at CHOICE, she checked facts, figures and statistics as a Verifier with the Editorial and investigations team. Jane has a Bachelor of Science from the University of New South Wales.  Find Jane on LinkedIn.