Electric vehicle (EV) owners in Australia are facing higher insurance premiums than their petrol-powered peers, with new research revealing striking price disparities depending on the model and insurer.
According to the first edition of Compare the Market’s bi-annual EV Insurance Index, the average quoted premium for a full battery electric vehicle (BEV) in March 2025 stood at $2,134—almost $500 higher than the average for hybrids and plug-in hybrids, which came in at $1,649. The findings, based on quotes for 20 popular EV and hybrid models across 11 major insurers and six underwriters, illustrate a market still grappling with uncertainty around risk and repair costs for newer technologies.
The report shows that despite a 6% drop in average premiums for Tesla’s Model Y and Model 3 since October 2024, those vehicles still attract some of the highest quotes—$3,109 and $3,334 respectively. By contrast, budget-friendly BEVs such as the BYD Dolphin and MG 4 Excite were quoted at $1,425 and $1,645 respectively.
For hybrids, the Toyota RAV4 GX led the pack at $1,772, while the Hyundai Kona Hybrid came in lower at $1,471. Even among these, the spread in quotes from different insurers was wide, with some differences exceeding $1,400 for the same vehicle.
David Koch, Compare the Market’s Economic Director, said many Australians are unaware of the large variation in insurance costs for electric vehicles—both within and across categories.
“There are quotes that vary by thousands for the same car depending on the insurer,” he said. “The Tesla Model 3 had a $3,100 gap between the lowest and highest quote. That kind of difference isn’t just a rounding error—it’s material to your budget.”
Koch warned that the cost of insuring electric vehicles may dissuade prospective buyers but stressed that the issue was often one of awareness and comparison.
“There’s no reason to feel locked out of owning an EV based on one or two quotes. What matters is doing your research.”
One of the core reasons for elevated premiums, as noted by the Insurance Council of Australia, is the cost of repairs. Labour and parts now account for roughly 60% of claim expenses, a number that’s risen steadily in recent years. EVs, with their complex battery systems and limited availability of parts, can be more costly to fix, particularly outside metropolitan areas.
However, this pricing gap is expected to narrow. As EVs become more common and repair networks expand, insurers will likely adjust their assumptions about risk and cost.
Data from the Australian Bureau of Statistics suggests EV adoption is continuing to rise, with hybrids now accounting for more than 10% of new vehicle registrations in some states. Federal and state government incentives—such as stamp duty exemptions and discounted registration—are also helping make EVs more accessible, though insurance remains an area without targeted support.
Compare the Market’s index comes at a time when broader inflationary pressures are already squeezing household budgets. As insurance prices rise across the board, consumers are being encouraged to treat policy quotes with the same scrutiny as vehicle prices.
The average premium figures from the report provide a benchmark, but they also highlight how volatile the pricing landscape remains:
Top BEV insurance averages:
- Tesla Model 3: $3,334
- Tesla Model Y: $3,109
- Zeekr X RWD: $2,016
- BYD Dolphin Essential: $1,425
- Top hybrid/PHEV averages:
- Toyota Camry Ascent Hybrid: $1,819
- Toyota RAV4 GX Hybrid: $1,772
- BYD Shark 6 PHEV: $2,071
- MG ZS Excite Hybrid+: $1,620
Even mid-range electric vehicles like the Xpeng G6 and Toyota bZ4X were quoted at around $1,600, further suggesting that perceived affordability on the dealership floor may not extend to insurance cover.
As the EV sector matures and insurers improve risk modelling and claims data for electric cars, premiums may gradually level out. Until then, consumers are being advised to read the fine print.
Koch’s message was clear: “Don’t just accept the first quote you get—shop around, compare inclusions, and make sure it fits your needs. The EV revolution is well underway, but getting the right cover is still a case of buyer beware.”
Disclaimer: Always read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) before purchasing an insurance product. Quotes and data referenced are based on Compare the Market’s March 2025 findings.
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⚡#EV #insurance costs $500+ more than hybrids in Australia (avg. $2,134 vs $1,649). 💸 @Tesla models top premiums ($3,100+), while @BYDCompany / @MGmotor under $1,700. Compare Market warns of $3k+ quote variations for same car. #TheIndianSunhttps://t.co/3HzY2wxnPL
— The Indian Sun (@The_Indian_Sun) June 5, 2025
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