Dream and drive
Dreaming of buying an EV? You might need to think again. Insurance claims frequency for electric vehicles (EVs) in Canada has jumped by over 39% in the last year.
The Electric Vehicles market in Canada is projected to grow by 15.54% (2024-2028) resulting in a market volume of US$ 14.7 billion, according to Statistics Canada.
Average electric car insurance costs in the U.K. leapt 72% last year, compared with 29%for gas and diesel models, reported the Financial Times.
Canadians can also expect higher insurance premiums as EV uptake increases, mainly because these vehicles are more expensive and cost more to repair.
Here are some other reasons for the higher insurance cost for electric vehicles:
1. Higher Claim Frequency
Despite having more advanced driver assistance systems, EVs experience a higher claim frequency. In 2023, electric cars had 17% more insurance claims than gasoline-powered vehicles
2. Severe Claims
Not only do EVs have more claims, but these claims are also 34% more severe, leading to significantly higher repair costs.
3. Advanced Technology Costs
EVs come equipped with sophisticated technology, including advanced driver assistance systems.
However, drivers may rely too heavily on these systems, sometimes leading to accidents.
4. Limited Qualified Technicians
Repairing EVs requires specialized knowledge, and not all mechanics are qualified to work on them. This scarcity of qualified technicians can drive up repair costs and insurance premiums.
5. Battery Replacement Expenses
EVs rely on expensive battery technology. If a battery needs replacement due to damage or wear, it can significantly impact repair costs and insurance claims.
6. Performance and luxury
Performance-oriented EVs come with powerful acceleration and luxury features.
The perceived risk associated with these high-performance models also drives up insurance costs.
7. Driving Behavior
Riskier driving behaviors, such as speeding, DUI, and distracted driving, increased across all vehicle types.
Additionally, the instant torque of electric motors can make EVs more powerful and potentially prone to aggressive driving behavior.
Are electric vehicles worth the high price tag?
EVs have lower operating costs due to cheaper electricity compared to gasoline. Maintenance is simpler—no oil changes or complex engine components.
Additionally, governments offer incentives like tax credits and rebates to encourage EV adoption.
However, the hefty price tag of a TESLA and other electric vehicles as well as the higher insurance cost, could dampen consumer enthusiasm.
In the end, whether an EV is worth it depends on your priorities. If you value sustainability, lower operating costs, and a futuristic driving experience, an EV might be the right choice.
But if you’re on a tight budget or need long-distance travel without frequent charging stops, you may need to think again about purchasing an electric vehicle in Canada.
