Electric vehicle insurance is facing a stress test as EVs accounted for 24.2% of new car sales in Australia in September, outselling petrol cars for the second month running.
Data from the Federal Chamber of Automotive Industries (FCAI) showed battery EV market share more than doubled from 11.3% in September 2025. Petrol car sales fell 36.2% year on year. FCAI Acting chief executive Dianne O’Hara said Australian motorists are “embracing a broader range of powertrains.”
NRMA Insurance, Australia’s largest motor insurer, said its own data reflected the trend. The insurer recorded a 72% year-on-year jump in EV insurance quote requests in September. Across the first nine months of 2026, EV quote requests rose 80% compared with the same period a year earlier.
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For brokers advising clients on motor cover, the pricing gap between EV and petrol policies is becoming harder to sidestep. CHOICE analysed more than 16,000 EV comprehensive insurance quotes and over 36,000 petrol vehicle quotes collected in January 2026 and found that EV owners pay an average of $2,545 per year, compared with $1,702 for petrol vehicles.
An April 2026 analysis by actuarial firm Taylor Fry found that EV premiums ranged from 0% to 39% above comparable petrol models, depending on the insurer and vehicle. The same analysis found a wider spread in EV pricing, with a $900 gap between the cheapest and most expensive quote for a BYD Atto 3 compared with $500 for a similarly valued Mazda CX-30.
As Insurance Business has previously reported, electric and hybrid premiums rose as Australian drivers moved away from petrol, with average comprehensive premiums for battery EVs climbing 10.2% in the 12 months to March 2026.
Those pricing differences reflect what is happening on the claims side. The Insurance Council of Australia’s (ICA) Motor Insurance Policy Paper, published in March 2025, noted that EV repairs require specialised parts, diagnostic tools, and trained technicians. The paper stated that batteries, sensors, and advanced onboard systems can be expensive to repair or replace, and that the limited number of repair shops servicing EVs drives up costs.
Across the broader motor insurance sector, repair costs have risen 26% since 2022 and make up roughly 60% of total claims costs, according to the ICA paper. The industry body has since outlined a reform plan aimed at curbing motor insurance costs nationally.
David Wilkes, executive manager of motor repair supply chain at NRMA Insurance in Australia, said the Middle East energy crisis, now in its eighth month, has pushed diesel prices toward $3 a litre in some capital cities.
“Improved charging networks, lower running costs and a wider choice of vehicles are making EVs an increasingly attractive option, particularly as high petrol prices put increasing pressure on household budgets,” Wilkes said.
The insurer’s Changing Gears: Closing the Confidence Gap report, conducted by Ipsos and based on a nationally representative survey of approximately 2,000 Australians, found that just 17% of respondents would not consider buying an EV. The share actively considering a battery EV rose from 20% in the survey’s first wave in 2024 to 31% in 2026.
Specific concerns persist. Battery health and longevity worried 60% of respondents, driving range concerned 56%, charging time 54%, and battery fire risk 52%.
“Some of the concerns we see around access to charging and battery health don’t reflect the reality of modern EVs, but that doesn’t mean they should be ignored,” Wilkes said.
He added: “Providing clear information and helping customers understand the realities of EV ownership will be key to maintaining this momentum.”
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EVs currently make up around 3% of NRMA Insurance’s motor policies. The insurer expects that share to reach approximately 10% by 2030. There are an estimated 500,000 battery EVs on Australian roads, representing around 3% of the national vehicle fleet.
Australia’s New Vehicle Efficiency Standard (NVES), which took effect on January 1, 2025, requires manufacturers to meet average CO2 emission targets for new vehicles supplied to the Australian market, according to the Department of Infrastructure, Transport, Regional Development, Communications and the Arts. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) forecasts that 97% of Australia’s light passenger vehicles will be electric by 2050 under a rapid decarbonisation pathway.
“As an insurer, we have an important role to play in helping customers navigate the transition to electric,” Wilkes said.
