Can EV sales shrug off high insurance costs?

Costly repair and replacement costs are driving auto insurance rates higher for electric vehicle (EV) owners, says a new report from rate aggregator Surex.

EV sales slipped during the first half of 2025 due to a rebate pause by Canada’s federal government, but a decent percentage of new car buyers say they opt for cars they can charge. But, there’s a trade-off for a lack of tailpipe emissions, insurance providers warn.

“Electric vehicles have lower maintenance costs than gas vehicles, but that gets offset by a significantly higher insurance price,” says Matt Dillon, the company’s executive vice president of national operations. The study notes maintenance costs are muted by the fact that EVs contain fewer moving parts than gas-powered cars; plus, they don’t require oil changes, spark plug replacement, or transmission work – all of which increase lifetime upkeep costs.

“The average cost to insure a gas car annually in Canada in 2025 is $2,289.27, while for an EV, that number is $3,131.43,” says the report, which finds the average electric vehicle in Canada costs 36.8% more to insure than a gas-fuelled counterpart.

Comparing insurance costs

The company says it reviewed hundreds of thousands of insurance quotes for both electric and gas vehicles over the past 12 months. Across Canada, it found electric vehicles more expensive to insure, with some differences among provinces that can be attributed to vehicle and driver mix. Some examples:

A key driver of high EV insurance rates is the increased risk of totalling an automobile following an accident. This happens more frequently because even minor damage to an EV’s battery can lead to replacing the entire unit – a repair that runs as high as $50,000, according to Surex’s report.

“Sometimes it makes more sense to just pay for a new vehicle entirely than to wait to order a new battery, pay for that battery and then have it installed,” says Dillon. “Gas cars are much more likely to come out of an accident only requiring individual parts to be replaced or repaired, at a far lower cost.” 

Infrastructure build-out

Surex’s study notes another challenge for EV owners is available charging infrastructure, as well as a scarcity of trained repair technicians relative to gasoline-powered vehicles. The latter “can increase repair costs due to specialized labour and potentially longer wait times,” the study says.   

Charging infrastructure installation does appear to be moving at a good pace. In an Oct. 2 press release, SureCharge Corp., an operator of public charging stations, says it will be adding 24 high-speed public charging sites in Alberta and British Columbia.

“The new network will fill critical charging gaps along key travel corridors, linking northern, central, and southern Alberta with British Columbia,” the release says. It adds the charging network additions will use $4.7 million in funding from the Canadian government as part of Natural Resources Canada’s Zero Emission Vehicle Infrastructure Program as well as an additional $400,000 from British Columbia’s government. 

“With this funding, Canadians traveling on Alberta and British Columbia highways will have access to more EV chargers where they need them most,” says Minister of Energy and Natural Resources, Tim Hodgson. “These chargers give peace of mind to current EV drivers and help address charging anxiety for those considering an EV purchase.”