IAG research points to a growing safety gap as lithium-ion-powered devices become more common in Australian households, raising questions for insurers about fire risk, safety standards, and claim severity.
IAG – whose brands include NRMA Insurance, CGU, WFI, ROLLiN’, and RACQ Insurance – is coordinating a multi-partner project examining how the increased use of lithium-ion batteries is changing household and property risk. The work indicates that devices such as e‑scooters, e‑bikes, portable power banks, and other rechargeable electronics are now routine in homes, with projections suggesting the average household may have about 33 lithium-ion-powered devices by 2026.
According to the insurer and its partners, the expansion in device numbers and product types is moving faster than existing safeguards, particularly where items are bought from online marketplaces. Safety specialists have raised concerns about low-cost or untested imports that may not comply with Australian safety standards or provide clear instructions on charging, damage, storage, or disposal, adding uncertainty for consumers and insurers. For insurance professionals, this growth is increasing the number of potential ignition sources in dwellings and shared buildings and complicating risk assessment across home, strata, and small-commercial portfolios.
To analyse these developments, IAG is working with Queensland University of Technology (QUT), EV FireSafe, Standards Australia, and iMOVE, Australia’s national centre for transport and mobility research and development. The program is examining how usage patterns, physical damage, and environmental conditions affect the likelihood and severity of lithium-ion battery failures.
Initial findings indicate that fire risk rises when batteries are damaged, exposed to saltwater flooding, charged incorrectly, or subjected to repeated knocks and vibrations. These situations are relevant for devices that are frequently moved or ridden, such as e-bikes and e-scooters, and for equipment stored in garages, sheds, or vehicles. Shawn Ticehurst (pictured right), head of the IAG Research Centre, said the development of safety frameworks is lagging behind the speed of uptake. “Consumers can easily purchase low-quality, often untested products online, and they aren’t getting the information they need about safe charging practices. By better understanding how battery condition and charging habits contribute to fire risk, we can help establish the guidelines needed to keep people safe,” Ticehurst said. The project is also looking at battery age and long-term usage, including whether older or heavily cycled batteries present additional hazards. The results are expected to inform updates to Australian standards, guidance for retailers and manufacturers, and insurer risk engineering materials, with full findings scheduled for release in 2026.
The research team is drawing on overseas examples to inform possible regulatory and market responses. QUT’s Energy Storage Research Group, led by Professor Joshua Watts (pictured left), has been assessing New York City’s response to a series of lithium-ion battery incidents. “We recently met with the New York City Fire Department to understand their approach. Between 2021 and 2023, New York recorded nearly 30 fatalities and hundreds of injuries linked to lithium-ion battery fires. To tackle the surge in fires, the city introduced strict safety measures and invested over $1 million in a public education campaign. Today in New York, retailers can no longer sell e-bikes or batteries unless they meet UL accreditation, a national safety standard. Refurbished batteries are banned, and retailers who repeatedly offend can be shut down. The measures have worked. By 2024, fatalities in New York had fallen to six,” Watts said. Australian regulators, standards bodies, and insurers are considering which elements of such frameworks – including accreditation thresholds, controls on refurbished batteries, and mandatory consumer information – could be adapted to local conditions and supply chains.
While attention is currently centred on smaller and portable devices, IAG’s analysis indicates that electric vehicle (EV) batteries have a different risk profile when they are undamaged and used according to manufacturer instructions. “There’s virtually zero fire risk if an undamaged EV is charged correctly. EV battery fires are extremely rare – they have advanced Battery Management Systems that prevent overheating and overcharging, and the packs are built with strong, fire-resistant casings that stop heat from spreading,” Ticehurst said. For insurers, this distinction is relevant when segmenting exposures between home contents, strata common areas, motor and commercial fleets, and when framing underwriting questions on charging locations, fire separation, ventilation, and storage practices for different device types.
Suncorp has reported similar concerns, citing incident data and claims experience. In November 2024, Suncorp and the Queensland Fire Department urged holiday shoppers to check product quality and safety credentials for electronics using lithium-ion batteries. According to the Queensland Fire Department’s 2024 figures referenced by Suncorp, there have been 325 lithium-ion battery-related fires in Queensland over the past two years, including 167 incidents since Jan. 1, 2024. Suncorp has recorded a corresponding rise in the number and value of home fire claims associated with these devices. “These devices, while generally safe, can pose significant fire risks if not handled and stored correctly. We have seen faulty devices both starting fires, but also accelerating fires. These high heat, rapidly spreading fires risk lives of individuals and emergency services, as well as causing significant damage,” said Suncorp executive general manager home claims customers, Alli Smith.
Smith said Suncorp is seeing more claims exceeding $500,000, often involving extensive structural and contents loss. “As we’ve seen in fire claims over the past year, these batteries can catastrophically fail, leading to explosive fires that can engulf a home in minutes. This level of destruction often results in total loss claims from an insurance perspective, with multiple claims exceeding $500,000,” Smith said. She added: “Do your research, check the integrity of the brands, check for safety certifications, and understand proper usage, storage, and charging guidelines. We encourage homeowners to review their insurance policies, understand coverage details, and prioritise safety measures to prevent incidents before they occur.”
The IAG-led project also extends to battery disposal and waste streams. Watts noted that the waste and recycling sector has estimated thousands of fires each year in Australia, many occurring in collection trucks and waste facilities and linked to incorrectly discarded batteries. “We’re investigating whether older batteries pose greater fire risk, and how everyday charging and storage habits affect long-term safety. The waste and recycling industry estimated there are 12,000 fires each year in Australia, mainly in trucks and at waste facilities caused by improper disposal. Batteries power our modern lives, and their role will grow as we cut carbon. But without care, they can cause serious harm,” Watts said.
As lithium-ion technology becomes more embedded in mobility, consumer electronics, and energy systems, Australian insurers are expected to keep adjusting underwriting, pricing, risk surveys, and customer communication to reflect the changing loss profile. With iMOVE also involved in the IAG research, industry participants are examining how decarbonisation-driven electrification interacts with fire risk and control measures. As iMOVE managing director Ian Christensen has noted, “Electrification is critical to cutting transport emissions. This work helps us understand and manage the unintended risks that come with more electric devices.” The emerging research and claims data are likely to guide future changes to underwriting guidelines, broker advice, risk engineering practices, and community education as battery use expands across personal and commercial lines.
