Does it cost more to insure an electric or hybrid vehicle? - Driving

Electric and hybrid vehicles have become popular options for many people. StatsCan reported over 50,000 registered ZEVs in Canada in 2020. According to a survey by KPMG in February 2021, seven in 10 Canadians who are planning to buy a new car in the next five years are likely to buy an electric or hybrid vehicle. 

With the rise in interest in emission-free vehicles comes an increased demand for car insurance for EVs. In March of this year, LowestRates.ca saw a 146 per cent year-over-year increase in the number of drivers looking for car insurance quotes for electric vehicles on its website. With generous incentives in British Columbia and Quebec, it’s no surprise that more people are in the market for a green car.

But how does owning an electric or hybrid vehicle affect your car insurance rates?

Insuring electric vehicles versus gas-fueled cars

Insuring an emission-free car is fairly similar to insuring any other type of car. 

“We would not treat the car differently,” says Sara Caruana, a service team leader at DirectRate.ca.

Whether the premiums would be higher largely depends on the model of the car, not its fuel source. 

The more expensive a vehicle is to replace, generally the more expensive it is to insure, too. Electric vehicle batteries, for instance, are costly to replace in the case of a collision. They may also require more specialized services to repair. As a result, you could pay a slightly higher premium. 

“What I highly recommend to all of our clients is to obtain an insurance quote with their broker’s office before purchasing a vehicle, to make sure the client has budgeted accordingly for the cost of the new vehicle along with the cost to insure it,” says Caruana. “If the client can obtain the VIN of the vehicle they are looking at insuring, it allows for the broker’s office to provide a more accurate quote, rather than simply relying on the year, make, and model only.”

Some electric vehicles are very expensive. For example, an expensive car like the Tesla Model S, would likely hit some carriers’ high-value vehicle limits — however, that has nothing to do with the fuel source, but rather its very expensive parts to replace and/or service.

Other non-luxury brands of EVs are more affordable, however, and those cars could result in lower premiums than more high-end models. 

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How to save money on insuring a hybrid or electric vehicle

“Truly, there isn’t anything different that the consumer needs to be aware of, except for maybe asking, ‘hey, am I getting an extra discount for having this hybrid or this electric vehicle?’” says Caruana.

For example: Both TD Insurance and Aviva offer a 5 per cent “green vehicle discount” on car insurance for electric or hybrid cars. You don’t need to do any special paperwork to qualify; once the insurance agent or broker enters your VIN, it should automatically apply.

If you’re buying a zero-emission vehicle (or any vehicle, for that matter), be sure to shop around for insuranceso that you get the lowest possible rate. 

Insuring an electric versus hybrid vehicle

Many people opt to purchase hybrid-electric vehicles, since the standard versions don’t need to be charged, and therefore don’t require the infrastructure that an electric vehicle does. Instead, they charge through something called regenerative braking, where as you brake or coast, a generator stores electricity to be used later on.

Whether you go with hybrid or fully electric won’t impact your insurance discount. Insurance companies make it clear that the discount applies for all zero-emission vehicles, which includes both hybrid and electric cars.

LowestRates.ca is a free and independent rate comparison website that allows Canadians to compare rates from 75+ providers for various financial products, such as auto and home insurance, mortgages, and credit cards.

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Does it cost more to insure an electric or hybrid vehicle? - Driving
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