Buying insurance for your EV is no different from buying insurance for an ICE (internal combustion engine) car, although it probably should be! Currently, there are no insurance policies in Australia that are tailored for EVs and most insurance policies do not even mention EV considerations.
Non-profit consumer advocacy organisation Choice has a good overview of what the differences are and what to look for in buying car insurance: Car insurance information, tips and guides for Australians | CHOICE. But it’s not specific to EVs of course.
CTP is Compulsory Third Party insurance and is required to register your car in each state. It covers you for liability if you injure someone else. All insurers have to provide the same level of cover, depending on the state. So having an EV generally won’t make any difference for CTP and prices are regulated so are generally the same. So there is no real need to shop around for CTP.
Optional types of insurance are Comprehensive, Fire and Theft, and Third-Party Property.
Comprehensive insurance covers theft, repairs to your car from an accident, and damage you do to other people’s property. People with newer and more expensive cars generally choose this option; even though it costs quite a bit more it is essential to protect your EV investment.
Fire and Theft – are you really worried about theft of your EV (hopefully you are using the PIN to drive)? Statistics show that EVs are also much less likely to be involved in fires than ICE cars. So this type of insurance seems to be of limited value for an EV.
Third-party property insurance only covers damage you cause to other cars and property. Third-party insurance is important generally for owners of lower-value cars to protect you from risk of being hit with a large claim from another driver’s insurer for which you could be personally liable. Most EV drivers probably won’t be too interested in this type of cover and will purchase Comprehensive, which already covers third-party risks.
Specific areas to consider in buying insurance for your EV are set out in each insurer’s Product Disclosure Statement (PDS) and include:
- Replacement car hire when your car is being repaired – is it important to you to have a replacement and do you require an EV? If so this may cost more. Most insurers do not mention the type of car you may receive while your car is being repaired. You may well end up with an ICE car.
- Windscreen coverage – some insurers include windscreen replacement as an add-on for an additional premium. Many EV owners want this cover, which is sensible as Tesla windscreens are considered to be more expensive to replace: Tesla windscreen or windshield replacement guide for owners (tesla-info.com).
- Replacement value vs agreed value – only if your car is a total loss (a ‘write-off’ and therefore not worth repairing) is the value that it is insured for relevant. Some insurers will pay for a new car if the written-off car is less than two years old. Agreed value means the insurer will pay a set price, generally the cost you paid for it or the current market value. Replacing with a new car is more expensive for the insurer so you can expect a higher premium for a policy that gives you a new replacement car or new car value. You are basically buying protection for increases in car prices as well as insurance.
- Choice of repairer – for an EV, anything other than very minor repairs will need to be done by an authorised repairer to comply with the warranty, and there may only be one or two near your location. So this option may not be particularly relevant or worth paying extra for.
- Home charging equipment – Some insurers’ PDS specifically state that they cover damage to your home charger.
- Fire – one insurer’s PDS (Allianz) states that they will cover battery thermal runaway fires provided there has been no deviation from manufacturer specification in relation to battery usage and charging.