Presented by Promutuel
Save on Electric Vehicle Insurance
By driving an electric car, you’re helping protect the planet. But did you get the best price on insuring it? To know for sure, you’ll need to consider things other than vehicle type. Read on to find out more.
Why insuring an electric vehicle can cost less
In their ads, some dealers are quick to trumpet lower insurance costs as one of the advantages of buying an electric or hybrid car. But don’t get too excited until you find out exactly how having an electric vehicle will affect the price of your car insurance.
When you buy car insurance, the insurer usually doesn’t ask whether you drive a gas or electric car. But some of the information you provide will have a direct impact on whether you save money on your premium:
- Your driver profile
- How you intend to use your vehicle
- Whether you’re eligible for discounts or subsidies
Your driver profile
Insurers need to determine whether they can count on you to be careful and avoid accidents. People who own electric vehicles are generally viewed as more responsible and less likely to file a claim. They also generally drive slower and for shorter distances.
How you intend to use your vehicle
To determine the cost of your car insurance, insurers need to know how often you plan to use the car per day, week, or month in order to determine frequency of use and the distances that will be driven.
To put it simply, the less you drive your car and the less mileage you put on it, the happier your insurer will be. Since most rechargeable electric vehicles have a relatively short range, insurers consider them highly insurable and charge less for coverage.
Discounts and subsidies
Having an electric car makes you eligible for a variety of savings. To support efforts to protect the planet, many provincial and national organizations offer incentives to those who drive electric or hybrid vehicles.
Anyone who purchases an eco-friendly can qualify for a range of subsidies that vary by region and vehicle type and features. You could also save on car insurance, since some insurers offer discounts tied to vehicle pollution levels.
These “green” discounts can shave as much as 20% off your total premium and vary the same way as subsidies. These premium discounts are where you’ll see the most savings on insuring an electric vehicle.
What might increase the cost of your car insurance
In addition to things that can reduce your car insurance premium, you need to be aware of factors that can increase it.
Your vehicle’s purchase price
If you purchase an expensive model with extra options, you’ll likely pay more for car insurance. This is because insurers calculate your premium using a rate chart that factors in how much they would have to pay out in the event of a claim.
So a car that costs $10,000 more than another model will have a higher insurance premium. Any discount or subsidy you get on purchasing the vehicle won’t change the rate chart, since the vehicle’s total insurable value is what determines the premium.
However, in some cases buying a higher value vehicle that is safer (technology, driver assistance, all-wheel drive) can be a wise choice regardless of the cost of insurance. For example, if a vehicle gets into accidents less often, that could offset its higher value.
The cost of repairing your vehicle
The insurance premium is also influenced by the cost of repairs. Depending on the type of coverage you choose, the price of your car insurance may be affected by how much you’d have to spend on repairs to your car after an accident. If you opt for third-party liability coverage only, the cost of repairs has no bearing, unlike with damage insurance.
Your insurance company will want to investigate the cost to repair your vehicle. Depending on your car’s technology and build date, your insurer may up your premium. But you may be able to lower it using some of the tips below.
You should find out how easy it is to repair your car. Some electric cars require specialized expertise and must be returned to the dealer for repair (Tesla cars, for example). Your insurance premium will reflect this.
How to insure your electric car for less
Some things can increase your premium, and some can reduce it. Keep in mind that your vehicle, whether electric or not, won’t cost any more to insure if your insurer has reasons to trust you. This is something to consider even before you buy a new car.
Before buying, you’ll need to check your budget, choose the right make, and determine the best car insurance for you. If you do your homework before buying an electric vehicle, your insurer will see that you’re conscientious. They will use that information to offer you insurance at a better price.
Your full profile
Your driver profile is more than just the type of car you drive. It also includes your age, profession, place of residence, and even your gender. For example, you may think younger drivers are more careless than experienced ones, but they could be eligible for discounts too if they’re students.
Where you live can also affect the cost of your insurance, as cities are notoriously more risky than rural areas. If you live away from a big city, your insurance will cost less. It may also cost less if you provide an essential service or work as a public servant.
Your driving record
Other things that can reduce your premium are your financial history and driving record. If you are stable and have a good credit rating and finances, your insurer will appreciate it. So try to put your finances in order before contacting them.
If you have seldom caused or been a victim of an accident and have not filed many claims, your insurer will see you as a good customer, someone who will not be a legal risk.
Your electric vehicle model
Some vehicle makes and models are considered more of a risk than others. So to snag a better deal you could choose a model that is easy to repair, or check the make’s claim history first. The Insurance Bureau of Canada produces a list of how cars measure up in terms of annual claims
by model year. If choosing an electric vehicle with fewer claims is an option, you will enjoy a lower premium. Your car’s position on the IBC list will give you an idea of what your insurer will think.
Coverage for your electric vehicle
The last thing you need to determine carefully to pay less on insurance is the type of coverage you need. Based on your profile and your insurer’s advice, you’ll be able to find the right car insurance for you.
- Third-party liability: This coverage is mandatory in car insurance. It protects you from the financial consequences you could suffer if you cause damage to another party.
- Collision or upset: This coverage provides compensation for collision and upset and all other accidents, such as theft and fire.
- Specified perils: This coverage protects only against certain damage stated in the policy (e.g., fire, theft, lightning, etc.).
- Perils other than collision or upset: As the name implies, this coverage covers all damage that is not due to collision or upset. Although it may seem expensive, this is the best coverage if you don’t want to take any chances.
By choosing carefully among these coverage options*, you can reduce the cost of your car insurance.
Choosing an electric vehicle model wisely will lessen the cost of your car insurance, while choosing rashly will increase it. To get the best value on your car insurance, follow the advice given here and consider other factors that could affect your insurance premium.
*Some exclusions apply.