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How Much Is Car Insurance for an Electric Vehicle in Ontario and Alberta?

July 12, 2021
7 mins
A woman waits for her electric vehicle to charge while using her phone and holding a coffee

If you’re mulling over purchasing a new car, are you thinking about getting an electric vehicle or hybrid (a vehicle combining an electric motor with a gasoline engine to power it) instead of an all gasoline-powered car or truck?

If you are, you might wonder whether car insurance costs less for an all-electric or hybrid car. Many automakers are committing to transitioning to producing electric vehicles in greater numbers in the coming years, including General Motors, Honda, Audi and Ford.

Currently, there are three categories of EVs available in Canada, all of which are considered zero-emission vehicles (ZEVs): battery-electric vehicles (BEVs), hybrid-electric vehicles (HEVs), and fuel cell electric vehicles (FCEVs).

According to data from Statistics Canada, registration of new ZEVs in Canada in 2020 was 3.5% (or 54,353 vehicles). Almost three-quarters (71.8%) were BEVs, up from 63.2% of registered ZEVs nationwide in 2019.

The federal government’s original targets to have 10% of all light-duty cars be electric by 2025, 30% by 2030, and 100% by 2040 might not be achieved. Analysis by Transport Canada suggests our country will only reach between 4% and 6% by 2025 and 10% by 2030. Recently, Canada announced it will ban the sale of fuel-burning new cars and light-duty trucks by 2035 to reach net-zero emissions across the country by 2050. Clearly, change is afoot.

ZEVs tend to cost more than their gas-powered counterparts, but they have significantly lower fuel costs. Ottawa introduced a program in May 2019 offering consumers rebates up to $5,000 for purchasing an electric car. But the rebate opportunities are not equal across provinces.

For example, Ontario used to offer up to $14,000 in rebates, but that program was scrapped by Doug Ford’s Conservative government after it was elected in 2018. Alberta does not have any provincial government incentives in place to encourage drivers to move to BEVs or plug-in hybrids. Whereas in Quebec, electric vehicle buyers can get up to $8,000 back, and in B.C., rebate incentives are around $3,000.

Meanwhile, and 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. Interestingly, 73% of men intend to buy a one, versus 62% of women.

However, so-called ‘range anxiety’ remains problematic to the swift uptake of electric vehicles by Canadian drivers. The same study finds of Canadians who say they will not buy one citing reasons such as concerns over limited driving range (51%), a lack of charging infrastructure (50%), and battery lifespan (30%). Concerning battery lifespan, the average driving range of new BEVs has been steadily increasing. In 2020, the weighted average range for a new battery electric car was about 350 km, up from 200 km in 2015.

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Which electric, hybrid, and gasoline-powered vehicles were the most popular in Canada in 2020?

Among the most popular BEVs in Canada in 2020 were the Chevrolet Bolt, Tesla Model 3, and Hyundai Ioniq. The most popular or HEVs or hybrids in Canada last year were the Toyota Prius Prime, Honda Clarity, and Mitsubishi Outlander PHEV. Meanwhile, the three best-selling gas-powered vehicles in 2020 were the Honda Civic, Toyota Corolla, and Hyundai Elantra.

How do all these vehicle types compare from a car insurance perspective?

To get an idea of what the insurance premiums are for each of the vehicles, we created a profile of a 35-year-old male driver with a clean driving record in Toronto, Kingston, or London. We also used the same profile for a driver in Calgary, Edmonton, or Lethbridge.

We then used both profiles to compare policies and premiums from a broad range of insurers using the RATESDOTCA free-to-use online quoting tool for a policy that includes optional collision and comprehensive coverages with a $500 deductible.

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:

Vehicle Vehicle Type Cost of Vehicle Annual Cost of Fuel* Insurance Premium in Toronto Insurance Premium in Kingston Insurance Premium in London
2020 Chevrolet Bolt BEV $44,998 $463 $1,676 $1,103 $1,510
2020 Tesla Model 3 BEV $44,999 $406 $2,154 $1,271 $1,594
2020 Hyundai Ioniq BEV $34,251 $411 $1,511 $821 $1,058
2020 Toyota Prius Prime HEV $33,550 $749 $1,628 $879 $1,125
2020 Honda Clarity HEV $44,505 $752 $1,716 $971 $1,242
2020 Mitsubishi Outlander HEV $43,998 $1,581 $2,003 $1,317 $1,433
2020 Honda Civic DX Gas-powered sedan $20,330 $1,846 $2,163 $1,249 $1,566
2020 Toyota Corolla LE Gas-powered sedan $23,591 $1,846 $1,953 $1,255 $1,568
2020 Hyundai Elantra ES Gas-powered sedan $17,249 $2,106 $1,866 $1,085 $1,390

* – 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 $1.30/L for regular gasoline, $1.45/L for premium gasoline, $1.30/L for diesel fuel and $0.13/kWh for electricity. For HEVs, annual fuel cost values reflect a mix of electric mode and gasoline-only operation.

  • 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 more than the three gas-powered vehicles, while the Mitsubishi Outlander hybrid plug-in also has a higher rate than the Hyundai Elantra.
  • In Toronto, the average premiums for both the BEVs and HEVs are comparable to their all-fuel counterparts. While the Hyundai Ioniq and Chevy Bolt BEVs feature the lowest average annual premiums across the board, the Tesla Model 3 has the most expensive premium of all vehicles featured here.
  • The average annual premiums for BEVs and HEVs in London are also within the range of the gasoline-powered cars but note the Elantra features a lower premium than both the Tesla Model 3 and Mitsubishi Outlander hybrid.
  • Both the BEVs and HEVs outclass the all-fuel cars in annual gasoline costs. Despite its higher average annual premium, the Telsa Model 3 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:

Vehicle Vehicle Type Cost of Vehicle Annual Cost of Fuel* Insurance Premium in Calgary Insurance Premium in Edmonton Insurance Premium in Lethbridge
2020 Chevrolet Bolt BEV $44,998 $463 $1,285 $1,205 $1,024
2020 Tesla Model 3 BEV $44,999 $406 $1,424 $1,405 $1,214
2020 Hyundai Ioniq BEV $32,299 $411 $1,197 $1,142 $924
2020 Toyota Prius Prime HEV $35,928 $749 $1,128 $1,156 $972
2020 Honda Clarity HEV $38,054 $752 $1,268 $1,198 $1,008
2020 Mitsubishi Outlander HEV $53,442 $1,581 $1,422 $1,343 $1,178
2020 Honda Civic DX Gas-powered sedan $18,390 $1,846 $1,454 $1,362 $1,178
2020 Toyota Corolla LE Gas-powered sedan $22,826 $1,846 $1,338 $1,266 $1,070
2020 Hyundai Elantra ES Gas-powered sedan $21,020 $2,106 $1,274 $1,224 $1,009

* – 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 $1.30/L for regular gasoline, $1.45/L for premium gasoline, $1.30/L for diesel fuel and $0.13/kWh for electricity. For HEVs, annual fuel cost values reflect a mix of electric mode and gasoline-only operation.

  • For Calgarians, the Hyundai Ioniq BEV offers the cheapest annual insurance rate, followed by the Toyota Prius Prime and Honda Clarity hybrids. Of gas-powered vehicles on this list, the Hyundai Elantra has the best insurance price, and it is less than the rates for the Tesla Model 3 and Chevrolet Bolt BEVs, as well as the Mitsubishi Outlander hybrid.
  • For drivers in Edmonton, and of fuel-powered cars on this list, the Hyundai Elantra has the lowest annual insurance premium. But the Chevrolet Bolt and Hyundai Ioniq BEVs, and Toyota Prius Prime and Honda Clarity plug-ins feature cheaper annual premiums than the Elantra. 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, and Lethbridge is no different. The Hyundai Ioniq BEV and Toyota Prius Prime plug-in both impressively feature annual premiums below $1,000. If you live in Lethbridge and drive a Tesla Model 3 BEV, you’re paying the cheapest premium for that particular vehicle than drivers in Calgary, Edmonton, Toronto, Kingston and London. 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-driven car to insure in Lethbridge, as it is in all the other cities.

Saving funds on insurance by choosing an electric or hybrid vehicle

Many insurance providers do offer a 5% discount on car insurance policies for both BEVs and HEVs. If your current provider does not, that’s reason enough to shop around and find an insurer that does.

Eventually, we will have fewer options to purchase a gas-powered car or truck. What will you do when that day comes? And if you’re looking to buy a new vehicle soon, are you considering getting an all-electric, hybrid, or a gas-powered car or truck? Let us know in the comments box below.

Liam Lahey

Liam Lahey is a versatile, seasoned writer and editor. He worked as both a staff writer and freelance writer for many business and technology publications as well as for several newspapers. He writes about home, auto, and travel insurance, and is a media spokesperson for RATESDOTCA.

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