Lithium-ion battery fires are becoming a pricing and underwriting issue for Australian insurers. Large insurers this week said battery-linked home fire claims have almost doubled in three years, and the Insurance Council of Australia warned that the growing risk may show up in premiums.
Suncorp told national media that home claims linked to lithium-ion battery fires almost doubled between 2023 and 2026. It named cheap e-bikes, e-scooters and power tools among the most common causes. The figures add to data the insurer has published before. In its 2025 annual results, Suncorp said the share of home claims above $500,000 involving a lithium-ion ignition source had doubled over five years, from 9% to 18%.
Large-loss data from other insurers points the same way. AAMI received more than 750 home fire claims in the first five months of 2025, with lithium-ion batteries in e-mobility devices among the most common ignition sources. RACQ Insurance recorded 469 house fire claims in Queensland across 2024 and 2025 and flagged lithium-ion devices as a growing cause.
The concern is severity rather than frequency. Damaged batteries, mismatched chargers and poor storage can trigger thermal runaway, which spreads fire quickly and can reignite after a blaze appears to be out. Suncorp said in late 2024 that these fires often result in total loss claims, with several exceeding $500,000.
According to a report from The Australian, the Insurance Council said each insurer sets its own premiums based on risk, and that the growing battery risk may be reflected in pricing. It encouraged policyholders to tell their insurer if they own an e-bike or e-scooter. It also warned that devices modified after purchase, or that do not meet the legal definition of an e-bike, may not be covered.
That warning puts disclosure on the agenda for brokers who place home and contents cover. Clients often regard an e-bike as an ordinary household item. A modified or high-powered model can turn a fire claim into a coverage dispute, depending on the policy wording and what the client disclosed.
The risk extends to businesses. Workplace insurer Mitti Insurance said it now asks prospective clients about lithium-ion batteries when writing commercial policies. Its questions cover where batteries are charged and stored, how damaged or returned units are isolated, and whether inspections are recorded. The insurer said many older commercial buildings were not designed for battery-heavy operations. Ageing electrical, ventilation and fire protection systems can compound the risk.
IAG is leading a multi-partner research program on how usage, physical damage and storage conditions affect battery failures. Its findings are due this year and are expected to inform Australian standards and insurer risk engineering guidance. The Australian Competition and Consumer Commission has estimated the average household will hold about 33 lithium-ion-powered devices by 2026.
For brokers, the practical effect is likely to appear first in proposal forms and risk surveys rather than in rates. Commercial clients that hold battery stock, run e-bike fleets or charge forklifts and power tools on site will face more questions. Those with documented charging and storage procedures should be easier to place.
At home, a short conversation about e-bikes and e-scooters at renewal costs little compared with a declined fire claim. With Black Friday on November 27 expected to bring another wave of cheap battery-powered goods, the timing suits that conversation.
