Results of a new Leger survey show that higher insurance costs are one reason why Canadians are hesitant to buy electric vehicles (EVs), according to the Canadian Underwriter.
As we inch ever closer to the 2035 deadline for Canada’s zero-emission vehicle (ZEV) mandate, interest in ZEVs is well below targets. In 2035, 100% of the sales of all new light-duty vehicles must be zero-emissions. However, the survey reports that just 31% of Canadians are interested in buying an EV, while 49% are not. In the first quarter of 2025, just 8.7% of new vehicle registrations were for ZEVs, which is less than half of the 20% target for 2026.
In a different online poll carried out in April 2025, results showed that only 17% of the 1,593 respondents declared an interest in purchasing an EV within the next five years. Nearly half (49%) said they weren’t interested in purchasing an EV at the moment, while nearly one-third (32%) said they have no plans for EV ownership, ever.
Forty-two per cent of Canadians surveyed cited the cost of EV repair and maintenance as a major concern, with 21% concerned specifically about insurance expenses.
In the first quarter of 2025, non-EV insurance premiums rose by 7.8% year-over-year, while EV premiums skyrocketed by 18.9%.
Not surprisingly, concern about insurance premiums for EVs varies by age groups. For example, 29% of those between 18 and 34 years old cite insurance costs for EVs as a concern, while only 17% of people 35 and older say they are concerned about EV insurance costs. Due to their lack of experience, vehicle insurance is far more expensive for younger people than older people, so it makes sense insurance costs would be a concern for that demographic.
In spite of those concerns, however, the study found that Canadians between 18 and 34 years old are the largest group of potential EV buyers, making up 41% of those interested in buying an EV.
Why are insurance rates higher for electric vehicles?
EV insurance tends to be more expensive than insurance for traditional gas-powered vehicles for several reasons.
First, EVs typically have higher sticker prices, which means the cost to repair or replace them is higher as well. Insurance premiums are closely tied with the value of the vehicle, so a higher-value vehicle means higher premiums.
Second, EVs come with specialized parts and are made using complex technologies, especially batteries. EV batteries often make up more than half of the car’s value and if they are damaged they are expensive to repair or replace. For example, a Vancouver driver was shocked to learn that small damage to his car’s battery cost $60,000 to fix — more than a new car.
Unfortunately, the owner was told the damage voided the warranty on his 2022 Hyundai Ioniq 5, forcing him to file a claim with ICBC, which simply wrote the car off due to the excessive cost.
EVs are far more likely to be considered totalled or a write-off by insurance companies because repair costs are so high, often reaching 60 to 70% of the vehicle’s value.
Another factor is performance. Many EVs, including Teslas, have rapid acceleration and high torque, which can contribute to higher accident rates at a higher severity, especially for less experienced drivers.
As EV technology becomes more mainstream and repair networks expand, insurance rates may begin to level out. But for now, insuring an EV remains a pricier proposition for many drivers.
Electric vehicle insurance options
In spite of risks, several insurance agencies provide what is referred to as a “green vehicle” discount for EVs, including Aviva, one of our providers.
Details include:
- Up to 10% off premiums when insuring an electric vehicle
- Free tows to the nearest charging station when your EV battery runs out of charge on the roadside
- A $2,000 subsidy for upgrading to an electric vehicle after a total loss
- Coverage for loss or damage to your charging cable or station
- Coverage for loss or damage to your vehicle including the battery (if it’s damaged as part of the loss) for a covered claim
In addition, if you bundle your vehicle and home insurance with Aviva, your EV equipment, including your charging station, will be covered by your Aviva property policy.
Aviva also offers discounts on Ivy Home level 2 charging technology. Ivy Home is a made-in-Canada smart home charger from Aviva’s partner, the Ivy Charging Network.
Features include:
- The ability to withstand temperatures as low as -30 degrees Celsius
- Fast charging speed of up to 48 km/hr
- Compatibility with all EVs
- The Ivy app allows you to manage your charging from your mobile device
- A full three-year warranty with around the clock support
Get more from your insurance with Lane’s
Lane’s Insurance is a leading Alberta-based brokerage, offering highly competitive rates on electric vehicle insurance and all your other insurance needs. We are pleased to serve homeowners and business owners throughout Alberta. Contact us at:
