Will your insurance cover a lithium-ion battery fire? Read this first

Here's a question most people never ask until it's too late: if a lithium-ion battery burned down your home, would your insurance actually pay out? The honest answer is "usually, but not always", and the difference often comes down to how you charged and stored the device.

The Insurance Council of Australia has been clear on the headline: most home and contents policies do not exclude fires caused by lithium-ion batteries (Insurance Council of Australia [ICA], 2025). But that's not the whole story. Insurers can dispute a claim where the fire is traced to negligence or a non-compliant device, and there have been Australian cases where cover was declined on exactly those grounds.

Where cover gets shaky

Two situations come up repeatedly. First, modified or illegal devices. An e-bike or e-scooter modified after purchase, or one that doesn't meet the legal definition, may fall outside cover (ICA, 2025). Second, unsafe charging and storage. The Insurance Council warns plainly that improper storage or charging poses a fire hazard and may lead to a claim being denied (ICA, 2025). If a battery was charging unattended overnight on a soft surface with a cheap aftermarket charger, an insurer may argue you didn't take reasonable care.

How to protect your home and your cover

• Buy reputable devices and don't modify them.
• Charge safely: compliant chargers, hard non-combustible surfaces, not unattended overnight.
• Store and isolate risky batteries sensibly, ideally in fire-resistant containment.
• Review your sum insured against today's rebuild and replacement costs (ICA, 2025).
• Consider telling your insurer in writing about larger lithium-ion devices and the precautions you take.

The good habits that keep you physically safe are, conveniently, the same ones that keep your insurance intact. Fire services attend these blazes almost daily now (Fire and Rescue NSW [FRNSW], 2024), so it's worth a five-minute conversation with your insurer, before the unexpected happens.

This is general information, not financial or insurance advice. Check your own policy and speak with your insurer.