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How much is car insurance for an electric vehicle in Ontario and Alberta?

Aug. 10, 2022
7 mins
A woman waits for her electric vehicle to charge while using her phone and holding a coffee

This article has been updated from a previous version.

Many automakers are committing to producing electric vehicles (EVs) in greater numbers in the coming years, including General Motors, Honda, Audi, and Ford. Currently, there are two categories of EVs available in Canada, both of which are considered zero-emission vehicles (ZEVs): battery-electric vehicles (BEVs) and plug-in hybrid-electric vehicles (PHEVs).

According to Statistics Canada, 5.2% of all new motor vehicles registered in Canada in 2021 were ZEVs, up from 2.2% in 2018. Of the ZEVs registered in 2021, 68.3% were BEVs and 31.7% were PHEVs, with both categories experiencing increases. In addition, the Government of Canada is working to meet a mandatory ZEV sales target of 100% for light-duty vehicles by 2035.

Though ZEVs tend to cost more than their gas-powered counterparts, they have significantly lower fuel costs, and in some places, can earn drivers rebates. However, provincial government incentives vary from province to province.

According to a February 2021 KPMG survey, seven-in-10 Canadians (68%) who intend to buy a new car in the next five years are leaning toward purchasing an all-electric vehicle or hybrid. However, so-called “range anxiety” remains problematic to the swift uptake of electric vehicles by Canadian drivers. The same study finds Canadians who say they will not buy one cite reasons such as concern over limited driving range (51%), a lack of charging infrastructure (50%), and battery lifespan (30%).

If you’re considering a ZEV, it’s also natural to wonder how much car insurance may cost for an all-electric or hybrid car. Below, we compare auto insurance premiums across BEVs, PHEVs, and gas-powered vehicles in three major cities in Ontario and Alberta to see how the costs stack up.

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What does it cost to insure an electric vehicle in Canada?

How do BEVs and PHEVs compare to gas-powered vehicles from a car insurance perspective?

To get an idea of the insurance premiums for nine models within each vehicle type, including the 2021 Chevrolet Bolt, 2021 Toyota Prius Prime, and 2021 Honda Civic, we created a profile of a 35-year-old male driver with a clean driving record looking for a policy with collision and comprehensive coverage in Toronto, Kingston, and London. We used the same profile for a driver in Calgary, Edmonton, and Lethbridge.

Using the same profile for each postal code, we compared premiums across a broad range of insurance providers using the RATESDOTCA auto insurance quoter.

Comparing car insurance costs for all-electric, hybrids, and gas-powered vehicles in Ontario

Here’s how the approximate insurance costs break down if you drive one of the following vehicles and live in Toronto, Kingston, or London:

ev-on

* – Estimated annual fuel costs are provided by Natural Resources Canada, and are based on the combined rating, a driving distance of 20,000 km, and forecast prices of $1.00/L for regular gasoline, $1.10/L for premium gasoline, $0.95/L for diesel fuel, and $0.15/kWh for electricity. For PHEVs, annual fuel cost values reflect a mix of electric mode and gasoline-only operation.

**Honda Clarity annual fuel cost as per 2021 fuel consumption guide.

  • Kingston is one of the cheapest cities in Ontario for car insurance. Not surprisingly, it features the most affordable rates for all vehicles. However, it is interesting to note the Tesla Model 3’s premium is higher than two out of the three gas-powered vehicles.
  • In Toronto, the premiums for both the BEVs and PHEVs are comparable to their all-fuel counterparts. While the Toyota Prius Prime and Chevy Bolt EVs feature the lowest annual premiums, the Tesla Model 3 has the most expensive premium of all vehicles featured here.
  • The annual premiums for BEVs and PHEVs in London are also within the range of the gasoline-powered cars but note the Honda Civic premium is higher than all but one EV, the Hyundai Ioniq.
  • Both the BEVs and PHEVs outclass the gas vehicles in annual fuel costs. However, the Chevrolet Bolt stands out as the cheapest BEV to drive.

Comparing car insurance costs for all-electric, hybrids, and gas-powered vehicles in Alberta

Here’s how the approximate insurance costs break down if you drive one of the following vehicles and live in either Calgary, Edmonton, or Lethbridge:

ev-ab

* – Estimated annual fuel costs are provided by Natural Resources Canada, and are based on the combined rating, a driving distance of 20,000 km, and forecast prices of $1.00/L for regular gasoline, $1.10/L for premium gasoline, $0.95/L for diesel fuel, and $0.15/kWh for electricity. For PHEVs, annual fuel cost values reflect a mix of electric mode and gasoline-only operation.

**Honda Clarity annual fuel cost as per 2021 fuel consumption guide.

  • For Calgarians, the Hyundai Elantra offers the cheapest annual insurance rate, followed by the Hyundai Ioniq and Toyota Prius Prime.
  • For drivers in Edmonton, the Hyundai Elantra has the lowest annual insurance premium overall. But the Toyota Prius Prime and Hyundai Ioniq have the cheapest annual premiums of the EVs. Of note, the Tesla Model 3 has the most expensive premium over all vehicles on this list in Edmonton.
  • Lethbridge is a smaller city than both Calgary and Edmonton. It’s not unusual for insurance premiums to cost less for drivers who live in smaller urban centres (fewer vehicles on the road can often mean fewer claims), and Lethbridge is no different. If you live in Lethbridge and drive a Tesla Model 3, you’re paying the cheapest premium for that particular vehicle than drivers in Calgary, Edmonton, and Toronto. However, the Model 3 is the priciest vehicle on this list to insure in Lethbridge. Meanwhile, the Hyundai Elantra stands out as the cheapest gasoline-fuelled car to insure in Lethbridge, as it is in all the other cities.

How to save on insurance when choosing an electric or hybrid vehicle

Some insurance providers offer discounts on car insurance policies for EVs. If your current provider does not, that’s reason enough to shop around and find one that does.

Since a few of the EVs featured have similar or even more affordable auto insurance premiums than gas-powered vehicles, in addition to lower fuel costs, EVs can make a good investment in either province. Though the purchase price may be higher initially, the long-term cost of EV ownership can be the cheaper —and greener — option.

Regardless of which vehicle type you own or choose to purchase, comparing car insurance rates across some of the top providers in Canada is the best way to ensure a cheaper premium.

Methodology

We used the following parameters to find out the lowest premium available for each 2021 vehicle model (base trim used unless otherwise specified):

  • Number of vehicles: 1 (2021 model)
  • Number of drivers: 1
  • Clean driving record (no collisions, suspensions, or traffic tickets)
  • Age: 35
  • Gender: Male
  • Residential postal code close to downtown in each city
  • Consistently licensed/listed on an insurance policy for 19 years
  • With current insurance company for two years
  • Collision and comprehensive coverage
  • Parked in private driveway
  • Drives 10,000 kilometres annually
  • Personal use
  • Winter tires
  • Did not opt for any discounts related to telematics or bundling

Interested in creating content with RATESDOTCA? Contact us at email@rates.ca.

Liam Lahey

Liam Lahey is a versatile marketer with experience as a staff and freelance writer for many business and technology publications and newspapers. He previously worked as the editor and media spokesperson for RATESDOTCA, handling home, auto, and travel insurance topics.

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