...the hidden costs of EV ownership are stacking up....

...the hidden costs of EV ownership are stacking up.

....practicalities an after thought.
Prepare for yet another big EV adoption hurdle

Apartment owners and strata managers are unprepared for the costs and complications of securing building insurance for blocks with electric vehicle owners and charging facilities.
Jennifer HewettColumnist
Jun 18, 2024 – 4.48pm


John Baines thought he was doing the right thing last March when he paid more than $2000 to install his own power plug in the underground carpark of his apartment to charge his new Tesla.
But he was shocked to discover the strata managers for his Townsville apartment block were struggling to renew the building’s insurance policy if there was any charging of electric vehicles or other battery-powered transport, like scooters, in the basement garage.

Baines and the four other EV drivers in his block of 100 apartments have now stopped charging at home until new insurance premiums can be sorted out.
“It did catch people in our building by surprise – that there would be any problem with insurers,” he says. “Until it’s resolved, I can’t, in good conscience, charge my vehicle because if, heaven forbid there was an incident, the whole building wouldn’t be insured.”

Prepare for yet another big hurdle in the expansion of EV numbers in Australia. So far, potential difficulties with building insurance, higher premiums, or upgrading power and fire protection management are little appreciated in the community.


The increasing number of fires due to self-igniting lithium-ion batteries in e-bikes or power tools – along with the costs and complications of retrofitting charging facilities in older buildings – mean this convenient state of insurance ignorance is about to end.

But right now, the most common response for those affected is confusion.

According to a letter from Baines’ apartment building insurer, Strata Community Insurance, the company is “working on a solution in consideration of the transfer of risk, the exposures now created in respect of EVC retrofitted into older buildings, buildings not otherwise designed to cater for EVC, particularly basement areas”.
As EV penetration increases, ownership and home charging – particularly in older apartment buildings – will be of increasing concern for insurers.
The company has been waiting for some policy and regulation on this issue, the letter laments, but new regulations have all been related to new developments.

Andrew Hall is chief executive of the Insurance Council of Australia, which counts Strata Community Insurance as a member. He warns bluntly this is a classic example of insurance being about pricing risk.

“This is a risk factor that has got to get mitigated and brought under control,” he says. “Regulation needs to catch up so strata committees can have confidence they are doing the correct work in retrofitting.

“If you are building an apartment block or a house these days from scratch, you put in very different safety designs around the charging of your EV. While EV fire incidences are low, they do happen, and they are very hard to put out.”

Pouring water on a fire doesn’t work for a lithium-ion battery that is smouldering or alight as it continues to heat up. Even luxury brands like Audi and Porsche have recently recalled some EVs due to potential battery defects risking fires.

This problem is certainly not limited to electric vehicles. There’s a far greater multitude of e-scooters, e-bikes and power tools of varying quality in use and, just occasionally, bursting into flames. The Insurance Council wants tougher safety control standards on imports.

EV owners already typically pay higher car insurance to accommodate more expensive repairs after accidents and a shortage of qualified technicians. But as EV penetration increases, ownership and home charging – particularly in older apartment buildings – will be of increasing concern for insurers always seeking to minimise potential payouts.

Australian apartments with even minimal external cladding that doesn’t meet the latest fire-resistant standards can’t get building insurance, for instance, after the horrific Grenfell Tower inferno in London in 2017.

But there’s been little clarity from offshore about evolving insurance rules on using or charging lithium-ion batteries in EVs or other equipment. “The data and issues are still not fully settled,” Hall says.
Meeting with Fire and Rescue NSW

The Insurance Council has meetings with Fire and Rescue NSW next month to try to standardise requirements for lithium-ion batteries in equipment or recommendations for EV charging in the hope other states will follow suit.

Last year, the agency reported 285 incidents involving lithium-ion batteries in NSW alone. Ten related to vehicle storage or car parks.

“In older apartment blocks, a lot of the car parks sit below services like gas, so great care has to be taken where the charging will take place,” Hall says. “The fire brigade needs good access to be able to put out these types of fires and quite often you can’t get a fire truck down there.

“We need to focus more carefully about where EV charging is happening. There are probably going to be quite a deal of safety upgrades required.”

That means substantial investment going well beyond the willingness of individual owners to pay to link their EV charging points to their own meters.

“Pricing generally will draw people’s attention to risk factors. And as it starts to flow through, building owners – particularly in apartment buildings – will be doing more to try to control these things,” Hall says.

Although he is unaware of outright refusals to insure buildings due to EVs, he notes insurance brokers have a range of measures they assess, while building managers are obliged to tell brokers if they have installed charging facilities.

“That may raise questions about what fire safety mitigation factors the building has put in place,” he says. “So these are things that strata committees have to think through very carefully when retrofitting, while developers building from scratch need to be talking to building regulation commissioners about how they can safely include charging stations.”

Meanwhile, Baines is seeking out public fast-charging facilities on the streets of Townsville rather than charging his Tesla overnight in his apartment garage.