How much does it cost to insure an electric car?

8 minute read Published on Apr 13, 2024 by BrokerLink Communications

White electric car plugged in for charging

Before buying an electric car, you may wonder how much it costs to insure. This is certainly an important question, especially when deciding if an electric car is worth it. Continue reading to learn more about electric car insurance, including what it covers and how much it will cost.

The cost of insuring an electric car

There are many good things about electric cars, but there are also several hidden costs of owning an electric car. Knowing these hidden costs is the best way to prepare you for your EV purchase. One cost that’s easy to forget about is electric car insurance.

Electric car insurance is mandatory in Canada, no matter what province you live in or what electric car you choose to drive. For example, if you drive a Tesla, you must purchase car insurance that meets the minimum coverage requirements in your province. To learn more about the different types of auto insurance or to request a Tesla car insurance quote, you can reach out to BrokerLink anytime. We also break down the mandatory coverage types for EV drivers in Canada later in this article.

The reality is that the cost of electric car insurance depends on several factors. Insurance companies will ask about the type of vehicle you bought, the type of electric car battery inside of it, and the cost of your vehicle. Specifically with EVs, the vehicle's make and model matter, and so does the type. For example, whether it’s a hybrid or a fully electric car could impact your insurance rates. However, beyond these vehicle-related factors, there are several other factors that an insurance company will use to calculate your premium. For instance, an insurance agent will assess your risk level by asking for other information, such as your age, location, gender, driving record, etc.

Given how much insurance costs can vary between electric car owners, your best bet is to contact an insurance broker near you and ask for a complimentary car insurance quote. This way, you can get an idea of how much it will cost to insure your electric car.

Is electric car insurance more than hybrid car insurance?

There are several differences between hybrid and electric cars. However, when it comes to insurance, they require the same types of coverage, and the cost can be comparable. That said, hybrid and electric car insurance tends to be more expensive compared to car insurance for a regular, gas-powered car. This is because, on average, these types of vehicles are pricier to purchase, and their parts may be more expensive to repair, such as their car batteries.

What factors impact electric vehicle insurance rates?

The following is a list of factors that can impact how much you pay for electric vehicle insurance in Canada:

  • Where you live
  • Age
  • Gender
  • Vehicle type
  • How you use your vehicle
  • Driving record
  • Driving experience
  • Past claims
  • Prior insurance coverage
  • Number of kilometers you drive
  • Type of coverage on your policy
  • Your deductible(s)

Is electric car insurance mandatory in Canada?

Yes, electric car insurance is mandatory throughout Canada. Regular auto insurance is typically required more than electric car insurance, as most still operate gas-powered vehicles. It doesn’t matter what brand or type of car you drive, you need to purchase coverage if you want to get behind the wheel. In Ontario, all EV drivers must purchase policies that contain the following four types of coverage:

If you do not insure your electric vehicle but choose to drive it anyway, you could face severe consequences if caught. Such consequences may include the impoundment of your vehicle, the suspension of your driver’s licence, and maximum fines between $25,000 and $50,000.

Compulsory electric car insurance coverage explained

To give you an idea of how mandatory electric car insurance coverage protects you, keep reading:

Third-party liability coverage

Third-party liability coverage will cover the cost of a car accident for which you are liable.This means if you cause an accident and it is deemed to be your fault, the costs of the accident will be covered by this type of insurance.

Accident benefits coverage

Accident benefits coverage can pay for the cost of medical care if you or someone else is injured in an accident. This type of coverage is highly recommended, as car accidents can cause a wide range of injuries.

Direct compensation coverage

Direct compensation coverage can pay for the cost of vehicle repairs if your car is damaged in an accident for which you are not at fault.

Uninsured automobile coverage

Uninsured automobile coverage can pay for the cost of an accident, whether those costs be medical expenses, repair bills, or both if you get into a collision with a driver who is uninsured, underinsured, or anonymous.

Optional electric car insurance explained

Moving on to optional car insurance coverage. The coverage types listed below are not government-mandated, but they do offer broad protection that gives many drivers peace of mind:

Collision coverage

Collision car coverage is a form of optional coverage that can pay for you to repair or replace your vehicle if it is damaged in an accident. You can file a collision coverage claim even if you were found to be liable for the accident.

Comprehensive coverage

Comprehensive car coverage can pay for non-collision-related incidents that occur with your electric vehicle. For instance, comprehensive coverage will protect you if it's damaged while parked, whether from a weather-related event or theft. The specific perils that most comprehensive insurance policies cover include vandalism, theft, fire, falling and flying objects, explosions and riots, and weather-related incidents.

Accident forgiveness coverage

One more type of optional car insurance coverage widespread among EV drivers is accident forgiveness. Accident forgiveness is additional coverage that can be added to your car insurance policy as an endorsement to protect your driving record and to help prevent your insurance premium from increasing if you have an at-fault accident claim. Note: coverage and eligibility vary by province.

How to lower your electric vehicle insurance premium

If you want to minimize how much you spend insuring an electric vehicle, read through the money-saving tips below:

Take advantage of electric vehicle insurance discounts

If you recently bought an electric car in Canada, then the good news is that you will likely be eligible for an insurance discount. Many insurance companies have started offering reduced rates to customers who drive EVs. So, if you drive an electric or hybrid car, be sure to let your insurance company know and ask about what discounts might be available to you.

In addition, you can also save money on the purchase price of your electric vehicle. This is part of a nationwide tax credit initiative implemented by the Federal Government that offers a rebate of $5,000 to EV owners and $2,500 to hybrid owners. On top of this, many provincial governments offer additional rebates and incentives. For instance, British Columbia has a $3,000 rebate for EV drivers, and Quebec provides a $8,000 rebate.

Find free charging stations in your neighbourhoods

When you first switch from a gas-powered car to an electric car, you may be wondering how electric charging stations work. More specifically, many people want to know how long an electric car takes to charge and how much EV charging stations cost. The good news is that the cost of some EV charging stations is free - you just have to know where to look. If you want to save money on your electric car, do some research on free charging stations in your neighbourhood. Many malls, office parking lots, and hotels offer free EV charging. Certain automakers also provide free charging plans for a limited time, so be sure to check with your car dealership to see if this applies to you.

Buy an electric vehicle with a high safety rating

There are many reasons to purchase reliable electric cars; a cheaper insurance rate is just the start. Not only do reliable cars tend to be safer, but they may also allow you to qualify for a lower premium. Due to their increased safety, insurance companies believe that drivers of reliable EVs might be less likely to get into accidents, and as such, they will lower your rates.

Choose an electric car with an extended battery warranty

You may not have thought much about car battery warranties before purchasing an EV, but with an electric car, it’s more important than ever. While it’s generally true that electric cars require less maintenance than gas-powered cars, on the off chance that they do require maintenance, it could be costly. This is especially true if the electric car battery needs to be repaired or replaced. Electric car batteries can cost up to $20,000, which is far more expensive than the cost of traditional car batteries. So, if you want to be covered for repairing or replacing it should the worst-case scenario occur, be sure to buy an EV with an extended battery warranty - ideally between 10 and 12 years. Learn more about hybrid and electric car maintenance here.

Charge electric vehicles at off-peak times to lower your utility bills

Installing an electric car charger at home is one way that many drivers choose to prepare their home for an electric car. However, not only can the installation process be costly, but so can the rising cost of utility bills when you start charging your vehicle via your home’s electrical system. Thankfully, one trick you can employ to keep your bills down is to charge your car during off-peak hours. Many electrical companies offer reduced rates during certain hours. These hours are usually overnight, such as between 11:00 p.m. and 7:00 a.m. Contact your electrical company to find out what hours they have cheaper rates for.

Pick high deductibles for your electric vehicle insurance policy

One last way to lower your electric vehicle insurance rates is to choose high deductibles. This is a tip if you want to save money on any type of car insurance policy. High deductibles will nearly always result in lower premiums. Remember that deductibles can be modified down the road. So, even if you decide you want to lower them later on, picking high deductibles right off the bat could save you money.

Contact BrokerLink for more information

If you are in the process of buying your first-ever electric car, then you probably have lots of questions. Whether you want to know more about how far an electric car can go, what it’s like to go on a long-distance drive with an electric car, or how much electric car insurance costs, you can come to us. The BrokerLink team will be happy to answer all of your questions and help you find the right insurance coverage at a competitive price. Since auto insurance is our specialty, you can rest assured that one of our licensed brokers will find you an unbeatable plan. We will match you with coverage that not only meets your budget, but that aligns with your driving habits and lifestyle.

Get in touch with BrokerLink today to request a free insurance quote or begin your car insurance journey. We can be reached over the phone, in person at one of our 200+ locations across Canada, or online. We look forward to meeting you!

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