What The EV Transition Means For Canadian Drivers And Insurance
The transition from internal combustion engine (ICE) vehicles to electric vehicles (EVs) is well underway in Canada. While the so-called “gas-car ban” never actually happened, the Government of Canada did update its Automotive Strategy to address emerging technologies.
The number of EVs on Canadian roads continues to increase. According to Statistics Canada, there were 43,113 zero-emission vehicle (ZEV) registrations in the first quarter of 2026, accounting for 10.8% of total new motor vehicle registrations.
What’s Driving the EV Adoption?
There is a greater number of affordable options available to consumers, thanks to major car companies such as General Motors, Ford, Nissan, Hyundai, and Kia offering more than just luxury brands.
There are still financial incentives available for Canadian consumers looking to make the transition to EVs. The iZEV rebate was replaced with the 2026 Electric Vehicle Affordability Program (EVAP), which offers rebates of up to $5,000 on qualifying battery-electric and fuel-cell electric vehicles, and up to $2,500 on certain eligible plug-in hybrid vehicles. However, rebate amounts will phase down over the program’s five-year term.
Operating And Repair Costs
While there are many reasons why Canadians are making the transition to electric, cost is likely to be a major consideration for some. Charging can cost less per kilometre than gasoline, depending on local electricity, charging and fuel prices. There are also fewer parts requiring regular maintenance.
On the other hand, costs around replacing EV components such as the battery and repairing EVs following a collision are expensive. Repairs require specific training for technicians and recalibrating safety and other high-tech components. Insurance companies are watching claims experience in relation to EVs to see if they’ll see increased physical damage claims and theft.
Insurance Costs
EVs aren’t necessarily cheaper to insure. It’s important for EV owners to shop around for quotes. The cost of insuring an EV will be based on the same factors used to determine rates for ICE vehicles. For example, insurers will look at the make, model, and year of the car, but also the trim. Insurers will also consider claims experience, theft, collision, and repair costs for your specific model of EV.
Read More: See Why EV Repair Costs Can Lead to Write-Offs.
Charging Access
Charging infrastructure continues to grow, but access to public charging is much better in certain regions and urban centres. Natural Resources Canada provides funding to build more level 2 and fast-charging stations across the country.
Read More: Compare Electric Car Insurance Options
How The Transition To EVs Will Affect Insurance Premiums
As the number of EVs on Canadian roads increases, insurers are gathering more claims data. This information can help them get a handle on whether they should be adjusting premiums for EVs. Here are some things they’re taking into consideration as they build out pricing for EVs:
- Vehicle Cost and Repair Expenses: While there are some cost savings around charging and maintenance, FSRA notes that parts, maintenance and embedded technology can raise physical-damage costs.
- Potential for Lower Risk Profiles: Some EVs come with technology that may help to prevent collisions, however, while EVs may be safer to drive, repairs following an accident may cost more because of this technology. So, safer doesn’t necessarily mean discounts.
- Usage-Based Insurance and Telemetry: Some insurers offer the option of connecting to your EV’s onboard computer to collect driving data. They may use this data to assess your risk. If you opt-in, make sure you’re comfortable with how insurers will be using your data, what happens to rates at renewal, and how long the company keeps this information. Keep in mind they’re looking at factors such as how much you drive, braking, acceleration, and more.
- Vehicle Autonomy and Advanced Driver Assistance: More and more vehicles are coming out with collision avoidance systems, automatic emergency braking, blind-spot monitoring, lane-departure warnings, adaptive cruise control, and other technologies that could help to reduce collisions. These systems use sensors and cameras. While they can help to reduce claims, they could also increase the cost of claims as they need to be adjusted or replaced after a crash.
Read More: Review the Hidden Costs of Owning an Electric Car
It’s Important To Compare Auto Insurance for Your EV
EVs may be safer and save money at the pump, however, repairs can be costly. As more data comes in around EVs, we’ll be able to get a better understanding of whether they’re cheaper or more expensive to insure. Insurers will be looking at specific makes and models.
Remember that auto insurance works a little differently in some provinces. BC, Saskatchewan, and Manitoba have public insurance systems, while in provinces such as Ontario and Alberta, auto insurance is mostly privately-run. No matter where you live, it’s always a good idea to compare auto insurance options.
Specifications of Insuring An EV
Most auto insurance policies are pretty much the same for EVs as they are for other types of vehicles. Keep in mind that mechanical breakdown is not covered by auto insurance, so mechanical battery failure or normal degradation is generally not covered, although damage from an insured peril may be. Degradation is considered normal use and won’t be covered by your policy. You’ll want to read your manufacturer’s warranty.
You’ll also want to understand how to get your EV fixed, who’s going to pay for towing, and more. You’ll also want to review your home insurance to make sure it covers your charger.