Price parity between gas-powered vehicles and electric vehicles (EVs) may be upon us sooner than experts predicted. This is not only because EV prices are coming down, but also because the average price of gas-powered and hybrid vehicles is rising. Add in the return of federal government EV rebates as well as the price pressure of upcoming Chinese imports, and this gap will continue to narrow over the next couple of years.
This is good news for up-front EV affordability, but it has insurance implications.
Why EV Write-Off Rates Are Increasing
Lower new vehicle prices and increased supply are contributing to declining used EV values, with EVs experiencing faster recent depreciation than gas-powered vehicles.
EVs are also prone to greater claim severity than gas cars. According to the most recent report from Mitchell, North America’s largest provider of collision repair information, EV average claim severity in Canada was $6,810 in Q1 of 2024 for EVs and $5,110 for gas cars, a 33% difference.
As insurers contend with lower resale values and higher repair costs, EVs are being written off more often than they once were.
Mitchell’s data shows the electric vehicle write-off rate in Canada was 7.48% of claims in the first quarter of 2024, an increase of 7% over the previous quarter and 29% from the quarter before that.
If your vehicle is declared a total loss, it’s important to understand your options. Learn how to handle a vehicle write-off situation.
Are EVs Written Off More Often Than Gas Cars?
While EV write-off rates have increased, they have remained broadly in line with comparable newer gas-powered vehicles.
For example, Mitchell’s Q1 2024 data showed that 2021 and newer ICE vehicles had a total-loss frequency of 7.44% in Canada, compared with 7.48% for EVs.
What Causes an EV to Be Written Off?
EVs can cost more to repair than ICE cars on average. According to Mitchell’s Q1 2024 data, EV repair estimates included 3.04 mechanical labour hours on average, compared with 1.66 hours for ICE vehicles.
This is partly due to the extra handling required for the battery even when it’s not damaged, as it needs to be fully de-energized and sometimes removed from the vehicle entirely to protect it during repairs.
Higher repair costs can represent a larger percentage of the car’s total value, increasing the likelihood that the vehicle will be written off.
The difference in repair costs has recently narrowed. In Q2 2026, average repairable severity was $6,645 for BEVs and $5,411 for ICE vehicles. Mitchell described this as the lowest difference it had recorded between the two vehicle types in Canada.
What Does This Mean for EV Insurance Premiums?
EV insurance premiums in Canada already tend to be higher than those for similar ICE vehicles. These trends could put upward pressure on EV insurance premiums, although declining vehicle values may partially offset that impact.
“What we’re seeing is a shift in how insurers evaluate EV risk,” said Aren Mirzaian, CEO of MyChoice. “Higher repair complexity is pushing claim costs up, while faster depreciation is pulling total loss values down. That combination makes EV pricing more volatile and harder to predict, both for insurers and for consumers.”
Bottom Line
Understand depreciation risk, not just purchase price. EVs may lose value faster than expected, which can directly impact how much you receive in a total-loss claim.
Consider a waiver of depreciation (OPCF 43 in Ontario). This coverage ensures you receive the original purchase price (or replacement cost) if your vehicle is written off, protecting you from rapid early depreciation.
GAP insurance may be even more important when you purchase an EV. If your vehicle is written off after a collision soon after you buy it, GAP insurance will cover the difference between what you still owe on it and what it’s worth when written off.