How much does insurance cost for an electric car?

With files from Jessica Ho

This article was originally published on June 22, 2021 and was updated on November 28, 2025.

Transportation is one of the leading causes of pollution, so it’s no surprise that the popularity of electric vehicles (EVs) is on the rise. However, there are many factors to consider when deciding to switch to electric, including insurance costs. How much does it cost to insure an electric car, and is it worth it?

What is an electric car?

An electric car is a vehicle that uses an electric motor and batteries to operate rather than a gas engine. These cars can be charged and recharged using either a wall outlet or a charging station.

NOTE: Most electric vehicles come with a charger that doesn’t need a charging station and works with a standard wall outlet, but many people upgrade to a full charging station for faster charging. Visit the Government of Canada website for more information.

There are mainly two types of electric-run vehicles: all-electric cars and plug-in hybrid-electric cars. All-electric cars run solely on their batteries, while plug-in hybrid-electric vehicles (PHEVs) can run on an internal combustion engine using gas after the battery has run out. 

Like driving any car around in Canada, you’ll need auto insurance for your electric vehicle to protect yourself and your investment in your new car. 

What type of auto insurance do I need for an electric car?

Electric car insurance (as well as hybrid car insurance) is far simpler than you think. The basic insurance requirements for your electric vehicle are the same as for any other car. In Canada, the mandated standard policy includes:

• Third-party liability insurance: protects you financially from claims of third-party damage, including property damage, bodily injury, and death 
• Accident benefits insurance: protects you financially if you, your passenger, or a pedestrian you hit needs medical benefits, such as physiotherapy or income replacement.
• Uninsured auto insurance: protects you financially if you’re in a hit-and-run accident or the other driver is uninsured 
• Direct compensation property damage (DCPD): provides financial compensation for your damaged vehicle, its contents, and the loss of use of your damaged vehicle (AB, ON, QC, NB, NS, PEI)

After you purchase the mandatory coverage, you can also choose add-ons, such as collision insurance, which protects your car while it’s moving, and comprehensive insurance, which protects your vehicle while it’s parked, from risks such as vandalism or fire. The added protection is always a good idea if you want the best car insurance for electric vehicles, as it could cost a lot to repair out of pocket without coverage. 

Like with any vehicle, you can also add auto insurance endorsements to enhance your policy, including loss of use coverage and accident forgiveness insurance. 

Electric car insurance factors to look out for

Driving an electric car comes with unique risks, so be sure to ask your insurance broker about any special coverage options. For example, some providers could extend your liability to cover any tripping accidents caused by your charging cable at a public charging station. You should also update your home insurance policy to cover your at-home charging station (if you bought one). 

How much does it cost to insure an electric car?

EV insurance rates are calculated in the same way as any other vehicle. Insurers offer premiums on a case-by-case basis, taking into account several factors, including:

Driver-specific factors:

• Demographics (gender, age, and location)
• Years of driving experience and license class
• Driving history (tickets, convictions, and accidents)
• Vehicle use (commercial or non-commercial)

Vehicle-specific factors:

• Make, model, and car value
• The cost to repair or replace 
• Where or how the vehicle is stored (eg, garage or street)
• How often or how far the vehicle is driven

Driver-specific factors vary from person to person, which is why it’s essential to get a personalized car insurance quote to see how much you’ll pay in premiums. 

However, to highlight the cost of auto insurance for electric cars, we pulled quotes using Ratehub.ca’s auto insurance tool for six popular EVs. The quotes are based on a 35-year-old female with a clean driving record in Toronto, including $1 million in liability coverage and a $ 1,000 deductible for both collision and comprehensive coverage.

NOTE: Green vehicle discounts have not been applied to the annual insurance premiums. 

Remember, these are estimates. Each person has a different set of factors that will impact their auto insurance premium. For example, if you’re a new driver or you’ve been in a few at-fault accidents before, then you would be paying more for insurance as a higher-risk driver. To determine the exact cost you’ll be paying for electric car insurance, you can use our car insurance quote calculator and find the best rates in a few minutes.

Is it more expensive to insure an electric car?

Typically, yes, it is more expensive to insure an electric car than a regular fuel-powered vehicle; however, that’s not always the case.

You might find your auto insurance premium is more expensive because electric cars generally cost more to repair or replace. This is because some parts cost more and require specialized mechanics licensed to work on electric vehicles. Additionally, the battery in an electric vehicle can be damaged in an accident, increasing repair costs substantially. The battery can cost thousands of dollars because it's a rechargeable lithium-ion battery, whereas a gas car battery wouldn’t cost more than a few hundred dollars. 

On the other hand, driving an electric vehicle can also come with discounts on auto insurance. Many electric cars have safety features, such as an automatic braking system, that can help lower insurance premiums by reducing the risk of a claim. Some auto insurance companies also offer a green vehicle discount, which can help you save on your insurance. For instance, Aviva offers a 10% discount for electric vehicles and a 5% discount for hybrid cars. Be sure to call your insurance company to ask about any cost reductions. 

In some cases, higher repair costs can be offset by available discounts and rebates, making insurance premiums comparable to those for traditional cars of a similar value. To discover the price comparison between electric and gas-powered vehicles, read our article: Are electric cars more expensive to insure?

The cost factor of an electric car

When purchasing an electric car, insurance isn’t the only factor you need to consider. A few other factors influence the cost of owning an electric vehicle, including: 

Gas

One of the main benefits of owning an electric car is saving on all that gas money, but how much do you actually save? It certainly depends on how much you plan on driving the car. According to Toronto Hydro, it costs about $530 a year to charge an EV ($1.45 per day) or about $925 a year ($2.50 per day) to charge a plug-in hybrid EV. In comparison, the cost of gas vehicles is $1,000-$2,500 per year. This means you could save anywhere between $470 and $1,970 without having to fill up your gas tank. 

Batteries

Electric vehicles also incur different expenses than traditional cars, such as battery replacements and charger installations. According to Mitsubishi Canada, the cost to replace an electric car battery can range from $5,000 to $15,000, though prices can vary based on the vehicle’s make, model and battery capacity. 

You may also need to purchase a Level 2 charger for your home. Level 2 charging stations are more efficient and powerful than the charger that comes with your electric vehicle (Level 1). Installation prices can vary; some sources estimate the cost between $700 and $2,500, others $1,200 and $2,000 and others as high as $1,500 to $3,000. However, prices will depend on factors such as your location, labour rates and the amount of electrical work needed. 

Government incentives

The Canadian government introduced the Incentives for Zero-Emission Vehicles (iZEV) program in 2019, offering up to $5,000 and $2,500 based on the vehicle. However, the program has now ended due to high demand, as all funds have been used. 

Some provinces also offered their own incentives for driving green. However, in British Columbia, the Clean BC Go Electric Rebates program is now paused as all funds have been allocated. However, rebates for installing a Level 2 home charging station are still available up to $350.

Quebec also offers a rebate program called Roulez vert that provides up to $4,000 for EV purchases. However, the government announced reduced incentives starting January 1, 2025, with the program scheduled to end on December 31, 2026. Quebec also offers a rebate of up to $600 for installing a home charging station. 

The green factor of an electric car

Driving an electric car eliminates the need to stop for gas, but that doesn’t mean it eliminates your carbon footprint entirely. While some EV batteries store a lot of energy, how green your driving is depends on where the energy comes from, which can vary across provinces. 

In general, about 67% of Canada's electricity comes from renewable sources, and 80% comes from non-greenhouse gas sources, such as solar, hydro, wind, and nuclear power. Benefits of driving zero-emission vehicles include reducing air pollution, which causes about 1,200 premature deaths in Canada per year. With nearly half of Canadians living near busy roads, where air pollution is higher, driving an electric vehicle can be beneficial to the environment and your health. Additionally, even when accounting for the greenhouse gas emissions from producing batteries, EVs still produce lower emissions than gas vehicles over their lifetimes. 

Still, electric cars are not perfect. This is especially true for plug-in hybrids. According to a CBC article, many drivers aren’t actually plugging their vehicles in and instead are using gas mode regularly, meaning carbon emissions are higher than you might think. Finally, many electric car batteries are made with metals, including nickel, cobalt, and lithium. Specifically, Lithium mining is connected to environmental destruction due to the harsh chemicals used in extraction and the large amounts of freshwater consumed in the process. However, advances in technology are making production more efficient.

The bottom line

Electric car insurance rates can be more expensive than the insurance for a conventional gas vehicle. However, auto insurance premiums are calculated based on many individual factors, making rates personal to your unique situation.

Aside from insurance, other factors to consider when purchasing an electric car include gas savings, maintenance costs, and the vehicle's overall environmental impact.  To see how much it will cost you to insure an electric vehicle, use Ratehub.ca’s auto insurance tool today. 

Also read:

• Are electric cars more expensive to insure?
• Is buying a hybrid car worth it? 
• 15 ways to get cheap car insurance in Canada