Our own EV insurance guide makes the case, correctly, that insurance shouldn't be a dealbreaker on a used EV purchase — plenty of individual models insure comparably to a similar gas vehicle. But that's a model-by-model story. Zoom out to the national averages, and a genuinely different picture shows up: Canadian EV insurance premiums are running 36.8% higher than gas vehicles on average, and — more importantly — that gap has been growing more than twice as fast as it's closing.
Quick answer: Canadian EV drivers pay an average of $3,131 a year to insure, versus $2,289 for gas vehicles — a 36.8% gap that's unusually wide by international standards (the UK's equivalent gap is roughly 13%, Australia's about 10%). The gap is widening, not shrinking: EV premiums rose 18.9% year-over-year in early 2025, more than double the 7.8% increase for gas vehicles. The underlying driver is a structural, self-reinforcing cycle tied to low EV adoption — but there's a genuinely encouraging exception buried in the newest data: the actual cost of repairing a damaged EV, as opposed to insuring one, has been narrowing.
The national numbers
The 36.8% premium gap comes from a combined analysis of Sussex International/Surex claims and premium data and Rates.ca pricing data covering 2025: the average Canadian EV driver pays $3,131 a year to insure their vehicle, against $2,289 for a comparable gas vehicle. What makes that figure notable isn't just its size — it's how it stacks up internationally. The equivalent premium gap sits around 13% in the UK and roughly 10% in Australia, both markets with meaningfully more mature EV insurance pricing than Canada's. In other words, Canada's EV insurance gap isn't just wide, it's wide relative to other countries working through the same underlying cost dynamics.
The growth rate is the real story
A one-time gap is a snapshot; the trend line is the actual news here. EV insurance premiums climbed 18.9% year-over-year in early 2025, compared to a 7.8% increase for non-EV premiums over the same period — meaning EV insurance costs aren't just higher, they're getting more expensive faster than the vehicles they're supposed to be converging with. That's the opposite of what you'd expect from a maturing product category, and it's the core reason this deserves treatment as a developing story rather than a settled fact about EV ownership costs.
Why: a self-perpetuating cycle
The explanation industry sources point to is less about EVs being inherently expensive to insure and more about a feedback loop specific to a market where adoption has stalled. Ontario insurance broker Wyatt Osborn described the dynamic bluntly: "It's like this circular argument. Adoption's low, so the premium stays high. But the premium stays high, which leads to adoption being low." Fewer EVs on the road means less claims data for insurers to price against confidently, which pushes insurers toward more conservative — meaning higher — pricing, which in turn makes EVs less attractive to prospective buyers, further slowing adoption and starving insurers of the claims data that would let pricing normalize.
Yvan Berthou, Head of Motor Group Underwriting at Zurich Insurance Group, put the shift in insurer behaviour plainly: "Initially, it was not uncommon for EVs to receive premium discounts, but this has shifted due to their unique risks and repair costs." That's a real reversal from the early-EV-adoption era, when some insurers used discounted EV premiums as a customer-acquisition tool.
This connects directly to a policy story we've covered elsewhere on this site: Statistics Canada data shows ZEV registrations fell 40% year-over-year in Q3 2025, as the original 2022 federal zero-emission vehicle mandate — which had been intended to force adoption up regardless of near-term cost dynamics — was effectively unwound. We covered Ottawa's formal repeal of that mandate in detail; this insurance data is a concrete look at one of the real costs of the adoption slowdown that repeal was responding to — the mandate, whatever its other flaws, had been one of the few forces working against this exact insurance-pricing feedback loop.
What's actually driving repair costs up
Behind the premium numbers sits real claims data. EV total-loss rates climbed from 5.9% of claims in 2023 to 8.7% in 2024 — a 47% relative jump in a single year — while average EV collision repair costs sat at $6,534 per claim against $4,958 for a comparable gas vehicle, a 31.8% premium at the repair-shop level. Frequency matters here too: repairable EV claims climbed 34% year-over-year through 2024. Put together, insurers are seeing EVs get into more repairable claims, get written off more often, and cost meaningfully more to fix when they aren't — three separate pressures pushing premiums in the same direction.
The repair cost gap is actually narrowing — but not for a fully reassuring reason
Here's the twist that didn't exist in the data even a few months ago: Mitchell's Q2 2026 collision-industry report shows the repair cost gap specifically has actually narrowed since those 2024 figures. In Canada, the average BEV repair cost is now $6,645 against $5,411 for a comparable ICE vehicle — a gap of $1,234, down noticeably from the roughly $1,576 gap in the 2024 data above. On paper, that's the first genuinely encouraging repair-cost data point in this story.
The honest caveat is in why it's narrowing. Mitchell attributes the improvement to two factors, and only one of them is fully good news. The first is a maturing EV fleet — more standardized repair procedures and better parts sourcing, which is a real, durable improvement. The second is less reassuring: a higher total-loss frequency, meaning more damaged EVs are being written off entirely rather than repaired, which removes the most expensive, complex repair cases from the average rather than actually making them cheaper to fix. A narrowing repair-cost average that's partly explained by "we're now just totaling more of them" isn't quite the same story as "EVs got measurably cheaper to repair."
There's also a forward-looking risk worth flagging: Mitchell's data shows BEVs draw 84.74% of their repair parts dollars from OEM-sourced components, versus 61.44% for ICE vehicles — meaning EVs are considerably more exposed to the kind of trade and tariff disruption we've covered in our look at Canada's Chinese EV import quota and the broader auto trade tensions playing out through 2026. A tariff shift on parts, not just finished vehicles, could put renewed upward pressure on exactly the repair costs that just started improving.
What this means if you're shopping used
The national averages above are real, but they're also a blunt instrument — our own EV insurance guide found realistic used-EV premium ranges of $1,500–$2,400 depending on the specific model, well below the $3,131 national EV average, because that average blends in newer, pricier, higher-performance EVs that skew the number upward. A handful of insurers — Co-operators, Desjardins, TD Insurance, and The Personal among them — still offer 5–10% EV-specific discounts, though those are becoming harder for insurers to justify as claims data comes in less favourably than expected. If you're shopping a used EV, the practical move is the same one that's always mattered more than any national average: get actual quotes for the specific model, trim, and postal code you're considering, rather than assuming either the reassuring model-specific ranges or the less reassuring national trend line applies directly to your situation. Worth noting too that this is a distinct cost driver from climate and wildfire-related insurance risk, which we cover from a geographic angle in our extreme weather EV ownership risk checklist — that's about where you live; this is about the structural repair-and-claims economics playing out nationally regardless of location.
The bottom line
Canada's EV insurance premium gap is real, unusually wide by international standards, and — as of the most recent year-over-year data — still growing rather than closing, driven by a self-reinforcing cycle where low adoption keeps claims data thin and pricing conservative. The one genuinely positive thread in the latest numbers is that repair costs specifically have started narrowing, though even that comes with an honest asterisk about why. None of this means a used EV is a bad insurance bet — model-specific pricing still varies enormously, and the national average obscures more than it reveals for any one buyer — but it's a trend worth watching, not a settled cost you can assume has already stabilized.
FAQ
How much more does it cost to insure an EV than a gas car in Canada? On a national average basis, 36.8% more — $3,131 a year for EVs versus $2,289 for gas vehicles. Individual model-specific costs vary widely and are often much closer to gas-vehicle pricing; see our EV insurance guide for realistic ranges by model.
Is the EV insurance gap getting better or worse? As of the most recent year-over-year data, worse on the premium side — EV premiums rose 18.9% year-over-year versus 7.8% for gas vehicles. The one improving metric is the actual repair-cost gap, which narrowed in Mitchell's Q2 2026 report, though partly because more damaged EVs are being written off rather than repaired.
Why are EV insurance premiums so much higher than gas vehicles? A combination of higher total-loss rates (8.7% of claims in 2024, up from 5.9% in 2023), higher average repair costs, and a self-reinforcing pricing cycle: low EV adoption means insurers have less claims data to price against confidently, so they price conservatively, which further discourages adoption.
Do any Canadian insurers still offer EV discounts? Yes — Co-operators, Desjardins, TD Insurance, and The Personal have offered 5–10% EV-specific discounts, though insurers are finding these harder to sustain as claims data comes in less favourably than initially expected.
Sources: Insurance Business Magazine, "Canadian EV insurance costs 36.8% more than gas. The gap is getting wider, not smaller"; Canadian Auto Dealer, "EV repair cost gap hits record low"; Mitchell, "Plugged-In: EV Collision Insights Q2 2026".
