What is an "eco-friendly vehicle" insurance discount?

In 2019, over 140,000 electric vehicles (or plug-in electric passenger cars) were in use in Canada alone. It's no surprise that electric, and even hybrid, vehicles are extremely popular. Electric vehicles are designed to use one or more electric motors. Hybrid vehicles are powered by an electric motor and an internal combustion engine, and the battery is charged through regenerative braking. Hybrid vehicles and EVs may seem like science fiction, but they are gaining popularity due to their sustainability and environmental benefits.

If you drive one of these vehicles, great! You're doing your part to "go green." Not only do these vehicles help you significantly reduce your carbon footprint, but did you know they could qualify you for an insurance discount? Some insurers offer a "green vehicle" discount for EVs and hybrid vehicles.

Are EVs and hybrid vehicles cheaper to insure than regular vehicles?

Electric vehicles (EVs) and hybrid vehicles are certainly gaining popularity in Quebec and Canada, and many insurance providers will reward you with a car insurance discount for owning one of these vehicles. But are these "eco-friendly vehicles" less expensive to insure than regular gasoline-powered vehicles?

The short answer is usually no. While demand for zero-emission vehicles is increasing, they are not common on public roads and are even more expensive to replace—especially electric vehicle batteries—in the event of a collision or other accident. They may even require a visit to a specialized auto shop for repairs. For this reason, most EV (and hybrid) owners are expected to pay slightly higher premiums. Some electric vehicles are significantly more expensive than others, such as certain high-value Tesla models. Premiums for these vehicles are expected to be much higher, but this is more related to the costly parts or the likelihood of theft, rather than the fuel source.

Even if you qualify for an insurance discount for owning an electric or hybrid vehicle, it won't offset the increased cost of a full vehicle replacement. You might be able to lower your rates even further by maintaining a clean driving record, driving less, increasing your deductible, and so on.

What other "green rebates" might I be eligible for?

The insurance industry wants you to go green, and it will encourage you to do so by offering discounts on a variety of different products. The list of green discounts isn't extensive, but there are a few things you can do to get started. Note that not all insurance providers will offer the same list of premium discounts, so it's a good idea to check with your insurance company before making any changes.

Paper disposal

Going paperless is probably one of the easiest "green discounts" you can get from virtually any insurer. Ask your carrier how you can lower your premiums by choosing not to mail your insurance documents and instead sending them via email or a mobile app. It won't get you a huge discount, but it's something—and it saves you the hassle of tracking down a pile of loose paperwork.

LEED certified homes

A LEED certification can be awarded by the Canada Green Building Council for both residential and commercial properties if they were built with environmentally friendly materials, are energy-efficient, and so on. Some insurers may offer discounts of up to 10% for LEED-certified homes. If your home is LEED-certified, discuss potential discounts with your insurer.

Pay-per-kilometer programs

Telematics can be used to assess driver behavior, but it can also be used to track distance traveled and offer discounts on insurance premiums to those who drive fewer kilometers than average. This is because the less you drive, the less likely you are to be involved in an accident. It will also help reduce air pollution by decreasing the time spent on the road.

Alternative fuel

Some insurers will reward you if you use an alternative fuel source, including electricity (for EVs and hybrids), but they might also reward you if you use biodiesel, hydrogen, ethanol, or natural gas.

Conclusion

While owning an electric or hybrid vehicle may qualify you for a small discount on your insurance premiums, this might not fully offset the higher premiums you'll ultimately pay for the total cost of replacing your car. For some lower-value EV or hybrid models, insurance premiums may not be as high.

There's a short list of other green discounts you can ask your insurer about. Not all insurance companies offer these discounts, so it's important to talk to your current company to see what you might qualify for. If you're unsure, call a Panda7 insurance broker today to discuss green offers and how you can save on your premiums.