Posthaste: If Canadians think car insurance is steep now, just wait until we're driving EVs
Canadians already complain about the higher costs of electric vehicles, but just wait until they get the insurance bill.
By 2035 all vehicle sales in this country will be zero emission, according to a mandate from the federal government.
But as Canadians replace their gas and diesel vehicles with electric in coming years, they should expect to pay more for auto insurance, says a report by credit rating agency Morningstar DBRS.
EV uptake has been slower in Canada than in Europe, the United Kingdom and even the United States for reasons ranging from the higher cost of vehicles, “range anxiety” in Canadian winters and a lack of charging stations.
New vehicle registrations of EVs in 2022, including hybrids, accounted for just 2.7 per cent of the total in Canada, according to Statistics Canada — far lower than in Europe and the U.K., where rebates are more prevalent and infrastructure more advanced.
Judging by the experience of drivers across the pond, Canadians can expect higher insurance premiums as EV uptake increases, mainly because these vehicles are more expensive and cost more to repair. Average electric car insurance costs in the U.K. leapt 72 per cent last year, compared with 29 per cent for gas and diesel models, the Financial Times reports.
One carrier even suspended coverage for EVs in order to reassess the cost of repairs, it said.
While an electric car has fewer serviceable parts than an internal combustion engine, the cost of replacing batteries, the availability of parts and fewer technicians to fix them can drive up the bill for repairs and insurance, said DBRS.
Batteries are expensive, representing about half the overall vehicle cost, and even minor damage can be a big deal. A small dent can destabilize the
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