Are electric cars more expensive to insure?

This post was originally published on October 5, 2023, and was updated on July 18, 2024.

It’s no surprise that electric cars have been growing in popularity. As more and more people are considering making the switch, one question often comes up: Are electric cars more expensive to insure? Let’s find out.

Are electric cars more expensive to insure?

It depends. Electric car insurance (as well as hybrid car insurance) can be more expensive than coverage for a gas-powered vehicle, but that’s not always the case. Generally speaking, the more it costs to repair or replace your vehicle, the more it’ll cost to insure. So a brand-new Tesla Model Y will most likely come with higher rates than a used Toyota Corolla. 

But when comparing vehicles of similar value, there are factors that can lead to an increase in your auto insurance premium, as well as factors that can lead to a decrease. Let’s explore why and how your bill might change when driving an electric car. 

Why might electric cars be more expensive to insure?

Here are a few factors that could increase the repair or replacement cost for an EV which then, of course, also increases the vehicle’s insurance rate.

Expensive parts – Electric car parts are often more expensive to obtain than gas car parts, leaving your insurance company with more financial risk in the event a damage claim is made.

Vehicle battery – EV battery packs can cost tens of thousands of dollars, and they can be difficult to repair or assess. Even the slightest damage may force insurers to write off the car completely as a total loss.

Repair training – Since electric vehicle technology is constantly evolving, specialized training or facilities may be required during the servicing process, causing repair bills to go up for your auto insurance company. 

Why might electric cars be cheaper to insure?

Conversely, other factors such as green vehicle discounts, advanced safety technology, and lower theft rates can help lower the insurance rate on an EV.

Green vehicle discounts – Some insurers reward customers who choose to go green. If you’re insuring an electric car with Aviva Canada, for instance, you can get up to 10% off your premium.

Safety technology – Safety features can limit your likelihood of getting into an accident which ultimately reduces your insurer’s risk of paying out a claim. And since many EVs are equipped with the latest technology (e.g. cruise control, collision detection), you could potentially see a lower rate.

Lower theft rates – Insurers also look at the statistical risk factors of your vehicle, and cars with higher theft rates lead to higher insurance rates. According to a recent article from The Globe and Mail, there’s less demand for stolen EVs overseas due to the lack of charging infrastructure there. And there are simply fewer EVs on the road (despite the recent surge in popularity), so data may show lower rates of theft overall. But of course, this can also go both ways if the specific electric car you drive is a frequently stolen model.

Also read: How stolen vehicle trends can impact your auto insurance

Electric car insurance vs. gas car insurance

For a closer apples-to-apples comparison, we looked at car insurance quotes for popular gas-powered vehicles that also have an electric (or hybrid) alternative – here's what we found when using Ratehub.ca's free auto insurance rate calculator. 

Methodology: All car insurance quotes represent an average of the three lowest rates received for a 35-year-old male with a clean driving record, living in Toronto, Ontario. The policy consists of $1 million in liability coverage, as well as a $1,000 deductible for both collision insurance and comprehensive insurance.

From this, we can see that EV insurance isn’t always more expensive than coverage for conventional gas-powered cars. While the average auto insurance rate for a hybrid-model Toyota Camry costs nearly 19% more, opting for an electric Kia Soul could lower your rate by over 10% each month. 

Keep in mind, however, that these numbers are specific to one hypothetical driver. You won’t know how much (or how little) you could be paying until you compare car insurance quotes for yourself – so be sure to do so with us today. 

The bottom line

While electric cars can come with unique insurance considerations, they won’t necessarily be more expensive to insure than gas-powered equivalents. And while the cost of coverage is an important consideration, make sure you’re taking other factors into account – such as all the potential gas savings – when deciding whether to go green.

Also read

• The hidden costs of owning an electric car
• The best electric cars in Canada for 2023
• Leasing vs. financing a car – how does it impact insurance?