The True Cost of Insuring an Electric Vehicle

According to Statistics Canada, in 2021 there were 152,685 battery electric vehicles and 95,896 plug-in electric vehicles registered. While over 90% of all registered vehicles on the road remain motor gasoline-powered, the number of hybrid, battery electric, and plug-in electric vehicles on the road is steadily rising with each passing year.

EVs, or electric vehicles, have been heralded as a more sustainable option than your traditional gas-powered vehicle, and they’re looking like the potential future of driving – in Canada, and in many other parts of the world. However, there are some things worth noting when it comes to insuring electric vehicles and the cost to insure them. In this article, we’ll get into some interesting facts about EVs if you’re considering the “sustainable life” plus a breakdown of insurance costs.

Interesting Facts About Electric Vehicles

Electric vehicles are an interesting move, since for many years we’ve heavily depended on our gasoline-powered vehicles to get around. Learning about them is the first step towards considering the transition from your average gasoline-powered motor vehicle to your sustainable, electric-powered variation.

Here’s some interesting facts about electric vehicles:

Fact Number 1: If your daily commute is less than 300-400km, an EV may suit you.

Today’s electric vehicles will typically have a driving range per-charge of up to 400km (although it varies by model) so if you commute less than this, then an EV can fit your needs and save you money. As electric vehicle models evolve too, they become capable of driving further.

Fact Number 2: Canada is looking to mandate electric vehicle sales.

New regulations imposed by Environment Minister Steven Guilbeault in December 2022 said that one-fifth of passenger vehicles in 2026 must be hybrid or purely electric. There has been some concern about the realism of this new regulation; it was followed by a mandate that would require 60% of all vehicles sold in Canada to be electric by 2030. While there is a significant demand in Canada for EVs, the current sales may not accurately reflect this goal.

Fact Number 3: “Dirty editorials” are causing pushback from electric vehicle skeptics.

The research out on electric vehicles in various countries is mixed. One paper from German researchers suggested that CO2 emissions from battery-electric vehicles were slightly higher than diesel engine. However, this claim was later tackled by numerous electric vehicle advocates and researchers who rebutted by suggesting EVs may have emissions of up to 43% lower than diesel vehicles.

Fact Number 4: There are many types of EVs, but three are more common than others.

The most popular electric vehicles you’ll see on the road today are battery electric vehicles – or BEVs/AEVs, plug-in hybrid electric vehicles (PHEVs), and hybrid electric vehicles (HEVs.) Depending on your lifestyle and what you need in a vehicle, which is best for you may vary.

Fact Number 5: EVs may have reduced maintenance requirements.

One cost benefit of battery electric vehicles is that they require less maintenance than conventional vehicles since there are less fluids. There are no oil changes, no spark plugs and wires, and no exhaust systems that need to be maintained. Of course, hybrid vehicles will still have gas motors, which require standard maintenance – but maintenance may be needed less frequently.

Fact Number 6: EV batteries have an extraordinarily low failure rate.

Everything has the potential to fail at some point, but the battery failure rate of electric vehicles on the road is said to be as low as 0.003%. Battery replacement for these vehicles can be costly, but the rate at which they tend to expire may vary based on their type and how they are used. Usually, EV batteries can last for the life of the vehicle.

Insuring an Electric Vehicle

Insuring an electric vehicle with auto insurance is certainly not unlike how you might insure any standard vehicle. You will be required to have a minimum of $200,000 third party liability insurance as well as other provincial mandatory coverages, including accident benefits and uninsured automobile coverage. That isn’t any different.

However, what may be different is the cost. Insuring an electric vehicle may not be any different than insuring a regular vehicle, but the value of the vehicle, its implications, theft likelihood, and other factors could make costs different. We’ll break that down in the next section.

The Cost of Insuring an Electric Vehicle

Depending on the overall make, model, and value of the electric vehicle you are driving, you may expect electric vehicle insurance costs to be a bit more than your average car insurance. EVs cost about 20% more than other vehicles on average, they have higher maintenance costs (and often require mechanics with specialized training) and have batteries that may be more prone to damage during a collision.

At the same time, EVs or hybrids may qualify for auto insurance discounts with many insurance providers, as an incentive for you “going green.” Also, since many purely electric vehicles are purchased as the owners of the vehicle don’t drive that far anyway (since EVs have a charge life of usually up to 300-400km) owners may also qualify for low mileage discounts. While electric vehicle owners won’t need any specialized insurance, like high-risk auto insurance (unless their circumstances call for it – like if they have had a lot of at-fault accidents in their EV), then you may expect your EV insurance to be around or a little higher than your average gasoline-powered vehicle insurance.

Here at Excalibur Insurance, we are happy to insure all kinds of different vehicles in the province of Ontario. The switch to green may be a long journey, but we’re happy to support you however you choose to reduce your carbon footprint! Give us a call today or get your own free quote to begin insuring your electric vehicle right away.