In the past couple of years, electric vehicles have become a hot topic of conversation. With companies such as Tesla being more commonly seen on the roads, electric vehicles are slowly changing how we look at cars. However, this isn’t as much of an uphill trajectory as it may seem, in the past year, the frequency of claims regarding electric vehicles appears to be rising. So, what is the reason? Isure has everything you need to know when it comes to electric vehicles and how to protect yourself.
Electric Vehicles cost more to repair
According to a study by Mitchell, EV’s are costing more to repair after a collision. To be more precise, it costs an average of $1,576 more to repair an EV after a collision, compared to its fossil fuel counterpart. To add to this, claims involving EV’s are growing as well, with an uptick of 3.94% in Canada for a year-over-year increase of 39%.
As the amount of claims continue to increase, the cost of repairing an electric vehicles battery continues to increase. The average battery for an electric vehicle costs the average Canadian $6,534 in claims repair in the past quarter. To compare, cars with an internal combustion engine (ICE) costs $4,958 to repair. This results in a difference of 31%.
“It remains to be seen whether the decline in sales is temporary, or, instead, reflects a broader shift in consumer sentiment,” reads the Mitchell report.
Despite this, plug-in hybrid sales continue to increase
With this, we continue to see a mild increase in plug-in hybrid electric vehicle sales with an uptick of 69.7% compared to the end of last year.
As the costs of repairing an electric vehicles battery continues to rise, we are also seeing a dip in the overall sale of EV batteries. In the second quarter, EV batteries took up 9.2% of all vehicles purchased. Though still a lot, this is a drop compared to the 10% that stood at the end of 2023. Mild hybrids have a small electric generator in place of a standard starter motor. This results in an increase in fuel efficiency while cutting emissions. This is due to the generator helping with quick acceleration as well as other fuel-costly functions.
“Like BEV’s, [plug-in hybrid] vehicles can be costlier to repair after a collision when compared to their internal combustion engine, or ICE, counterparts,” Ryan Mitchell, Mitchell’s director of claims performance told Canadian Underwriter.
“However, with both ICE and small-electric battery, mild hybrids are remarkably similar to gasoline-only powered automobiles when it comes to claims severity.”
Claim costs differ by each type of electric vehicle
It is important to keep in mind that claims costs will also differ depending on the type of EV.
Mild hybrid electric vehicles (MHEV) cost an average of $5,302 to repair. On the other hand, plug-in hybrid electric vehicles (PHEV) cost closer to $5,665 to repair. Both vehicles rely on a large, high-voltage battery. On top of this, a secondary ICE.
British Columbia and Quebec are two Canadian provinces with the the highest frequency of repairable claims. These come out to both 7.07% and 5.14% respectively. Each of these provinces represent less than one per cent of the increase since the end of 2023.
The total loss frequency between BEV’s and newer ICE vehicles strike a similar chord. Canadian BEVs were written off as a total loss of 7.24% of the time (down 3% from the first quarter of 2024 and up 44% from the 2nd quarter of 2023. Newer ICE vehicles were deemed a total loss of 8.52% at the time. These are considered equally as complex as battery electric vehicles when it comes to repairs.
Electric Vehicles and insurance
As the popularity of electric vehicles continues to increase, being prepared is crucial. If you plan on purchasing an electric vehicle, it is important to have the correct insurance to go with it. The cost of insurance for an electric vehicle can vary greatly. In Ontario, it is mandatory for all vehicles to have a basic car insurance policy. If you are insuring an electric vehicle, you can expect to pay anywhere from $190 to $400. This will include the following:
- A minimum $200,000 in third-party liability coverage
- Accident benefits coverage
- Uninsured motorist protection
- Direct compensation property damage coverage.
Remember, if you have any questions regarding insurance for either your EV or traditional vehicle, reach out to us at isure! If you need to make an electric vehicle auto insurance claim, contact us or request a quote today!
Thinking of going green? Let's examine the pros and cons Read more
Eco-friendly cars are all the rage these days, but are Read more
The revolution of electric vehicles is gaining speed in Canada. Read more
