Insurance and Lithium-Ion Batteries: What Australian Insurers Are Asking, What Premiums Are Doing, and What's Already Excluded

Insurance and Lithium-Ion Batteries: What Australian Insurers Are Asking, What Premiums Are Doing, and What's Already Excluded

Insurance and Lithium-Ion Batteries: What Australian Insurers Are Asking, What Premiums Are Doing, and What's Already Excluded

Australia's largest insurer, IAG (which owns NRMA Insurance, CGU, WFI, ROLLiN' and RACQ Insurance), is leading a major research project with QUT, EV FireSafe, Standards Australia and iMOVE to understand and reduce lithium-ion battery risks. The findings will inform national standards — and almost certainly inform what gets covered, excluded or surcharged on home, business, motor, caravan and strata policies through 2026 and beyond.

The early signals are already in the market. Insurers are increasingly asking about EV chargers, home batteries, e-bikes and e-scooters at quote time. Some are tightening exclusions for fires caused by uncertified or aftermarket equipment. Strata insurance premiums have risen sharply in lithium-heavy buildings. And the gap between what owners think their policy covers and what it actually covers is widening fast.

This post is for homeowners, business operators, strata committees and EV/e-bike owners — what insurers care about, what's likely to change, and how to stay ahead of the curve.

IAG research announcement: IAG lithium-ion battery research
EV FireSafe: https://www.evfiresafe.com/

Why insurers care now

By 2026, the average Australian household will contain around 33 lithium-ion battery-powered devices. Fire and Rescue NSW recorded 323 lithium-ion battery fires in 2024 — a 95% increase over two years. Queensland recorded 240 in 2025, with at least six fatalities. Western Australia recorded an average of one lithium-ion fire every second day. South Australia's metropolitan fire service has seen lithium-ion callouts increase nearly tenfold over five years.

For insurers, every one of those incidents represents a claim. The numbers are rising fast enough that the insurance industry is no longer treating lithium-ion as a niche emerging risk — it's becoming a material driver of household and commercial loss ratios.

What insurers are asking — and writing into policies

At quote time

Increasingly common questions on application forms:

  • Do you have a home battery (BESS) installed?
  • Do you have an EV charger installed at the property?
  • Is the charger professionally installed and compliant with AS/NZS 3000?
  • Do you own or store an e-bike, e-scooter, or e-skateboard at the property?
  • How are these devices charged (location, supervision)?
  • Do you operate a battery-powered fleet, lithium-ion repair workshop or battery storage facility?

For caravan and motorhome policies:

  • Is your lithium battery install certified to IEC 62619?
  • Does your van's electrical system comply with AS/NZS 3001.2:2022?
  • Was the work done by a qualified auto-electrician?
  • Do you have written compliance documentation?

Common exclusions and conditions

Patterns emerging across Australian policies (note: every insurer is different, always read your own PDS):

  • Exclusions for fires caused by aftermarket, modified or uncertified batteries
  • Exclusions for fires caused by using a non-original charger
  • Conditions requiring RCM-marked devices and chargers
  • Conditions requiring professional installation of chargers and batteries
  • Conditions requiring batteries to be charged in specified locations (not bedrooms, not exits, not unattended overnight in some policies)
  • Strata policies starting to require specific by-laws around lithium-ion before extending cover
  • Higher excesses for battery-related fire claims

The strata insurance squeeze

Strata insurance has been getting harder to place for a few years, and lithium-ion is now part of why. Buildings with high concentrations of EVs, e-bikes or home batteries — and no by-laws to manage them — are seeing:

  • Higher base premiums
  • Fewer competitive quotes
  • More questions about EV charging arrangements during renewal
  • Conditions requiring specific fire safety equipment in common-property charging zones
  • Conditions linking premium to existence of an EV/lithium-ion by-law

The recent NSW strata reforms (July 2025 sustainability infrastructure protections and the 2026 right-to-charge bill) accelerate the conversation. Owners corporations can no longer block sustainability infrastructure on aesthetic grounds — but the insurance side of that equation lands on the scheme's lap.

The four most common policy mistakes

1. Assuming standard contents insurance covers everything

A fire caused by your e-bike charging on the kitchen bench may or may not be covered, depending on your policy's wording around lithium-ion ignition causes, the bike's certification status, and whether your charger was the original equipment. Read the PDS.

2. Failing to disclose

If you fitted a home battery, installed an EV charger, or store multiple e-bikes at the property, and you didn't tell your insurer at the most recent renewal — that's a disclosure issue. Most policies require notification of any material change to risk. A failure to disclose can void a claim.

3. Buying aftermarket replacement batteries

Cheap, non-OEM replacement packs for e-bikes, e-scooters, power tools and drones are heavily implicated in fires. If a fire is traced to a non-compliant or aftermarket battery, expect a much harder claim.

4. Not keeping compliance documentation

Electrical Safety Certificate for your home charger, AS/NZS 3001.2 compliance certificate for your caravan lithium install, AS/NZS 5139 install paperwork for your home battery, IEC 62619 documentation for your battery packs. Keep all of it. After a fire, this is what an insurer will ask for first.

What you can do to stay insurable

  1. Disclose everything. EV charger, home battery, e-bikes, e-scooters, mobility scooters, large lithium-ion tool collections. Some may attract small surcharges; not disclosing attracts much bigger problems.
  2. Buy certified gear. RCM-marked devices and chargers, IEC 62619-certified batteries, CEC-approved home batteries, EN 15194-certified e-bikes (mandatory in NSW from March 2026).
  3. Use original chargers only. The single most common avoidable cause of lithium-ion fires.
  4. Keep your compliance paperwork. A scanned folder of certificates is enough — make sure it's not living only on your phone.
  5. Have appropriate fire safety equipment. Increasingly, this is what differentiates a fully-paid claim from a partial settlement. It also reduces the size of the loss.
  6. Review your sum insured. Modern EVs ($60k–$120k), home batteries ($10k–$30k installed), and bundled lithium-ion devices have pushed up the value at risk in a typical Australian home. Old sums insured don't reflect this.

The fire safety equipment angle

Insurers don't typically mandate specific fire safety equipment in residential policies (yet) — but they increasingly favour properties that have it, especially in strata, commercial, fleet and aged care policies. The argument is straightforward:

  • A blanket and extinguisher in a garage doesn't prevent a lithium-ion fire
  • But it dramatically reduces the size of the loss — limiting damage to the device or vehicle rather than the building
  • That's the kind of risk mitigation insurers reward, formally or informally

Practical setup for a typical Australian property:

For commercial properties, strata schemes, and fleet operators:

https://evfiresolutions.com.au/collections/industrial-ev-fire-solutions

For brokers and insurance professionals

If you're a broker advising clients across home, strata, commercial or motor lines, the lithium-ion conversation is one of the highest-value conversations you can have right now. Most clients haven't been asked the questions, haven't disclosed the relevant items, and don't have the documentation. A 15-minute review of their property's lithium-ion footprint protects them at claim time and protects you against E&O exposure. We're happy to provide guidance documents you can share with clients.

Talk to us

If you're working through what your insurance situation looks like — as a homeowner, a strata scheme, a business or a broker — we're happy to help you scope the right fire safety setup to match. We supply across Australia from Sydney.

Browse the full range: https://evfiresolutions.com.au/
Get in touch: https://evfiresolutions.com.au/pages/contact or sales@evfiresolutions.com.au

The cheapest part of any lithium-ion incident is the fire safety equipment you bought before it happened.

This article is a general summary of insurance market trends related to lithium-ion batteries. It is not insurance advice. Always read your own Product Disclosure Statement and consult a licensed insurance broker for advice specific to your circumstances.

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