In the rapidly evolving landscape of electric vehicle (EV) adoption in Australia, a new challenge has emerged for Owners Corporations managing apartment buildings and strata complexes. As EV ownership increases, these bodies are facing growing difficulties securing insurance coverage that adequately addresses the perceived fire risks associated with electric vehicles and their charging infrastructure.
The Insurance Landscape Shift
Recent industry reports indicate that insurers across Australia are reassessing their approach to buildings with EV charging facilities, particularly those with underground or enclosed parking areas. According to Insurance Business Australia, insurers are “tightening expectations around how buildings manage EV infrastructure,” with particular focus on cable storage, maintenance schedules, and fire protection systems.
This shift in the insurance landscape has created tangible challenges for Owners Corporations. In a notable case reported by the Australian Financial Review in June 2024, strata managers for a Townsville apartment block struggled to renew their building’s insurance policy due to EV charging activities in the basement garage. The resident had invested over $2,000 to install a charging solution, only to discover that this seemingly forward-thinking decision had created unexpected insurance complications.
Perception vs. Reality: The Fire Risk Debate
At the heart of this issue lies a significant disconnect between the perceived fire risk of EVs and the statistical reality. According to comprehensive data collected by EV FireSafe, a battery-fire research company:
- Of the 40 million EVs on roads worldwide in 2024, only 580 confirmed incidents of battery fires have been recorded from 2010 to June 2024
- Just 15 per cent of these fires occurred while vehicles were connected to chargers
- In Australia specifically, with more than 200,000 EVs on the road, only nine battery fires have been documented since 2021, with just one occurring during charging
Despite these statistics suggesting a relatively low actual risk, state fire authorities have taken a cautious stance. Some have recommended that buildings with EVs and charging infrastructure should be classified with the same hazard status as facilities storing hazardous materials, such as fireworks factories or chemical plants.
This regulatory confusion has created a challenging environment for Owners Corporations trying to navigate insurance requirements while also accommodating the growing number of residents with electric vehicles.
The Ripple Effect on Strata Communities
The insurance challenges have triggered a chain reaction within strata communities. According to ABC News reporting from December 2024, some strata committees are now proactively banning EV charging in their basement carparks altogether, citing insurance concerns as the primary motivation.
Fred Tuckwell, chair of the Owners Corporation Network advocacy group, notes that attitudes toward EV charging within Australia’s 1.2 million strata committees often follow broader political trends, creating additional complexity in decision-making processes.
For EV owners living in apartments, this creates a significant barrier to ownership. Julie Stone, a Tesla owner featured in ABC’s reporting, described being banned from using even a standard power outlet for charging despite using equipment that draws no more power than common household appliances. “What surprised me was the absolute hatred and angst regarding EVs in the carpark and how they’re always catching fire and blowing up,” she noted, highlighting the emotional and often misinformed nature of the debate.
Finding a Path Forward
For Owners Corporations navigating these challenges, several approaches may help balance the needs of EV owners with insurance requirements:
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Transparent communication with insurers: Marsh, a major insurance broker, advises that it’s “important to inform your broker and/or insurer if you have electric vehicle charging stations within your building complex” to ensure appropriate coverage.
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Professional installation and certification: Ensuring that charging infrastructure is installed by qualified professionals and regularly inspected may help mitigate insurer concerns.
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Updated fire safety systems: Some buildings are proactively upgrading fire protection systems to address insurer requirements, though this represents an additional cost burden.
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Dedicated EV charging areas: Designating specific areas for EV charging, particularly in well-ventilated or open-air sections of parking facilities, may help address safety concerns.
As Australia continues its transition toward electric mobility, with EV sales increasing 16.3% in 2024 alone, the insurance industry’s approach to these vehicles remains in flux. While some major insurers like IAG have publicly confirmed “zero fire risk” concerns for properly maintained EVs, the broader market continues to adjust its risk assessment frameworks.
For Owners Corporations, staying informed about evolving insurance requirements and working proactively with insurers and fire safety experts represents the most prudent path forward in this changing landscape.