Despite these differences, insuring an EV isn’t radically different from insuring a fossil fuel vehicle, but there are some special considerations drivers should be aware of before going electric.
What kind of coverage do I need for an electric car?
EV auto insurance isn’t any different than insurance for a vehicle with an internal combustion engine. Both are subject to the same mandatory insurance coverages.
In every Canadian province and territory, auto insurance policies include third-party liability to cover potential lawsuits against you for injuring or killing someone in a crash, as well as uninsured auto coverage to pay for damage caused by an uninsured driver. In every part of Canada except Newfoundland and Labrador, auto insurance policies must also include accident benefits to cover the costs of lost income, rehabilitation, healthcare and funeral expenses stemming from an accident.
Collision and comprehensive coverage are mandatory in Saskatchewan and Manitoba, and they’re good add-ons no matter where you live. The first covers the cost of repairing or replacing your vehicle after a collision, and the second covers you for damage caused by a break-in, fire or theft. EV owners might want to consider coverage for loss of vehicle use as well—it covers transportation costs if you are in an accident and your vehicle is temporarily in the shop.
How much does it cost to insure an electric car?
Insurance companies use something called the Canadian Loss Experience Automobile Rating (CLEAR) system to calculate how risky a particular vehicle model might be to insure. CLEAR rates every aspect of a vehicle model, from its anti-lock braking system to the likelihood of it being stolen. A CLEAR score of 100 represents the average; lower and higher scores represent less and more claims risk, respectively. The vehicle’s scores are then reflected in the driver’s insurance premiums.
So far, few EV models have been rated using the CLEAR system. Rob de Pruis, director of consumer and industry relations at the Insurance Bureau of Canada, says there isn’t enough data to know whether EVs are more or less expensive to insure than gas-powered vehicles. But EVs might have a few strikes against them.
For starters, EVs are often more expensive than equivalent fossil fuel-powered cars, making them more costly to replace. A vehicle’s price tag alone can drive up insurance premiums. Potential repair costs have a similar impact. The relative newness of EVs means that many repair shops aren’t equipped to fix electric motors or power banks (which serve as portable backup batteries for longer trips). “[These parts] do have a life expectancy, just like other components on your vehicle,” de Pruis says. “If they were damaged in a collision, they can be quite expensive to repair.”
Is it more expensive to insure an electric car?
“Generally speaking, the fuel source of your vehicle doesn’t lead to an automatic increase or decrease in premiums,” de Pruis says.