Car insurance for gas cars is a mandatory requirement for every registered vehicle in most countries, like Australia and the UK. But gas cars aren’t the only vehicles car owners should insure. Although they may differ in mechanisms and designs, electric vehicles also need to have specific car insurance before they get driven out of the shop.
In Australia, the most basic and mandatory form of car insurance is compulsory third-party insurance, or CTP insurance for short. This type of insurance covers personal liabilities made to third parties from road accidents you’re involved in.
While this insurance type offers affordable premiums, it is the least helpful in actual accidents due to its limited coverage. Comprehensive car insurance is a much better deal—providing coverage for natural disasters, collisions, vandalism, and a lot of other incidents.
Many add-ons included in a typical car insurance policy may differ whether you’re operating a gas-powered car or an electric vehicle. Let’s break down the main differences so you’ll know what to expect when getting electric car insurance.
Let’s start!
Main Differences of EV and Gas Car Insurance Types
Here are the main differences you have to consider when evaluating both gas car insurance and electric vehicle insurance.
1. Insurance Premium Costs
The major difference that distinguishes traditional car insurance from EV insurance is its cost.
According to a 2024 finding, owners of one of five of the most popular and best-selling electric vehicles in Australia pay on average 43% more for their insurance policy than people who own engine cars. Hybrid car owners pay, on average, about 5% more than gas car owners.
By the numbers, EV car owners spend about $1,788 for their vehicle every year for comprehensive insurance alone.
This is no small figure, as it’s estimated that EV insurance made up the second-biggest ongoing expense for EV owners in Australia last year. The cost may even offset the perks of EV ownership in the first place, such as fuel charges.
The reason for this increased price difference is the lower accessibility to EV car part replacements. Batteries and specialised parts are often imported from overseas and expensive to replace, so if an insured individual does have to claim, the insurer spends more to secure that specific car part and have the car patched up.
Furthermore, the repair costs typically are high for EVs too since they require more specialised skills compared to normal gas car mechanical work. All these variables contribute to a higher-than-average insurance premium for an EV.
Here’s a silver lining: You don’t have to be locked to an expensive, year-long contract by opting for an EV car insurance policy.
For owners of a Tesla Model 3, Tesla Model 3 car insurance with ROLLiN’ allows you to bounce off within a month’s notice whenever you’re feeling the financial pinch. They also allow you to sign up in the future whenever you’re ready to protect your finances once again.
2. Battery Coverage
EV car insurance can include battery coverage as an add-on. The car battery is one of the most expensive parts of an electric vehicle, and it’s also the most important—essentially acting as its main power source.
In the event of a battery malfunction, this additional coverage can help replace or cover the cost of repairing or replacing the battery. Having battery coverage and comprehensive coverage also helps in case you encounter an accident due to a battery problem, like experiencing a battery fire.
Insurance policies may also include extended warranties on top of the manufacturer’s own warranty coverage.
With a standard car battery being both expensive and hard to replace—ranging from $7,000 to $30,000 depending on the car, having an EV comprehensive insurance plan with a battery coverage add-on can help minimise financial ruin once your electric vehicle starts to become inefficient or slows down over time.
3. Specialised Roadside Assistance
As many EV owners are aware, electric vehicles have unique mechanisms that differ greatly from traditional gas cars. For one, they’re powered by electricity and not gas. This means that the typical roadside assistance perk present in standard car insurance policies won’t work as gas and diesel doesn’t work for these EVs unless they’re hybrid cars.
The unique needs of an EV are met if you opt for EV car insurance. For instance, if you do end up low on fuel, in an accident, or simply stranded, roadside assistance for an EV would be providing mobile charging units to help your car power up and recharge.
Conversely, they can also assist you by providing towing services to the nearest charging station instead of the nearest service station.
Furthermore, since tyres of EVs are more sensitive than gas cars due to a heavier build, towing services are structured in a way that leads to the least damage possible. That’s why most EVs undergo flatbed towing instead of getting pulled and dragged from their bumper.
4. Coverage for Charging Equipment
Another major difference that EV insurance policyholders have that traditional gas-powered car policyholders don’t is coverage for charging equipment. This is naturally the case as electric vehicles run on electricity, charging ports, home charging stations, mobile adapters—the whole setup.
EV-specific policies can accommodate the unique requirements of EVs since they’re built with that specific vehicle in mind. This means that if any of these charging components break or get stolen, they’ll be covered under most circumstances by the EV policy.
This is a good thing, as many of these charging equipment can cost upwards of a hundred for a single piece, and thousands for an entire setup. With EV chargers being an expensive investment, having a policy to protect you in case your original one breaks is key to preventing incurring high replacement costs.
5. Fewer Insurance Providers
The market for electric vehicles is vastly smaller than that of traditional cars. However, interest in sustainability and green consumerism is steadily on the rise, and there’s a definite keenness for many people to make the jump to EV ownership.
That said, in its current state, gas-powered cars are still king—and the insurance policies you can find online in local cities reflect that. A vast majority of car insurance providers offer only traditional car insurance with few distinct incentives for EV owners.
However, times are changing, and more insurance providers are capitalizing on the growing number of EV releases in the market today. Over time, the options for EV insurance policies will certainly widen and competition can tighten, thus creating a healthy market of EV insurance providers with an incentive to appeal to their customer base.
6. EV Government Grants
Another key difference between EV and gas vehicle insurance is the access to various government grants and incentives. These grants come in various forms and can be given in both a state or federal context. For instance, common rebates include subsidies, rebates, and tax breaks for EV purchases made for personal and business use.
There are also grants that support the payment of recurring costs such as charging costs, spare car parts, and of course, insurance premiums. Accessing these grants is a great way to offset the initial cost of the eclectic vehicle and support its widespread adoption.
