Canadian Underwriter

Which policyholders want EVs — and why it will cost them more in premiums

December 15, 2022   by Alyssa Di Sabatino

Man in a button-down white shirt and blue jeans holds a blue electric car charger near the charging port of a white car

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Canadian male policyholders are more interested in electric vehicles (EV) than female policyholders, according to a Deloitte survey — and this could affect their already pricier insurance rates, said RatesDotCa. 

Of the Canadians buying a vehicle in the next three years, 32% said their next purchase will be an EV, Deloitte’s 2022 Global Automotive Consumer Study found.

Across all age categories, male consumers are more interested in EVs (42%), compared to female consumers (39%) and non-binary/gender non-conforming consumers (40%), according to the study, which garnered responses from 1,005 Canadian consumers. 

EVs affect car insurance rates, “It’s not necessarily the fuel source that affects your premium, rather the cost of replacement parts,” said a RatesDotCa blog post. “EV batteries can be expensive and require specialized service, so this may result in an increased premium.” 

Some EV models also fall under carriers’ high-value vehicle limit, which increases premiums. “On the other hand, some insurance providers offer a ‘green vehicle discount,’” RatesDotCa noted.  

On top of that, male consumers already tend to pay higher premiums, which are modelled based on driving habits. Of 1,851 transport deaths reported in 2018, the majority (1,313) involved male drivers, according to figures quoted in previous Canadian Underwriter reporting.  

However, many consumers are uninterested in paying for advanced technologies — a mainstay of many EVs — including alternative powertrains and vehicle connectivity. This is another factor that could affect insurance rates, RatesDotCa found.  

These advanced technologies have often added safety features but tend to be expensive, which adds to the replacement cost, and by extension insurance rates, RatesDotCa added. 

“Tech-loaded vehicle parts, like bumpers with sensors or wing mirrors, are more expensive to repair and replace than their less sophisticated counterparts,” RatesDotCa reported. “These added expenses for insurance providers can result in increased premiums for drivers, even if the vehicle is technically safer than a basic model. In this case, less tech could mean a lower rate.” 

Other survey results showed personal vehicles are the preferred method of transportation for 79% of Canadian respondents, followed by public transportation (9%) and taxi/ride-hailing (3%).  

Another 84% of Canadians would prefer to purchase a vehicle in-person at an authorized dealership, and cited wanting to see the vehicle (83%) and test driving the vehicle (67%) as reasons. For those who buy via a virtual process, convenience was the number one reason (52%).  


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