These cars are causing a moral dilemma for brokers

While many brokers would love to recommend these cars to their clients, its high premiums may compel them to do otherwise

Environmental

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Many Canadian brokers recognize the value that an electric car can bring to drivers: many models are smart, swift and boast an excellent fuel economy and safety ratings.
 
There is a downside requiring their full transparency, however: insurance premiums are notably higher for electric cars than their gas-powered counterparts, according to a new analysis conducted by NerdWallet.
 
The researchers compared the auto insurance rates of four vehicles that are manufactured both in gas and electric models: the Chevrolet Spark, Volkswagen Golf, Smart Fortwo and Fiat 500.
 
They found that drivers of electric cars in California paid 21% higher premiums on average than drivers of gas cars every year. The analysts partially attribute this disparity to the fact that electric cars are generally worth more, which can lead to a higher insurance payout in the event that one is damaged or stolen.
 
In addition, although electric cars typically require less service than their gas siblings, their repairs typically cost more since they require expensive technical parts and specialized labor.
 
Similar data is not yet available for the Canadian market, and even if insurance rates are higher for electric vehicles, those numbers are always subject to fluctuation.
 
“When rating new or relatively new vehicles, premiums are based on statistics so the vehicle one bought new or pre-owned might, at the time, have a given rate group, but experience of those vehicles could move the groups around, causing a change in premiums,” said Paul Armstrong, partner, Paul C. Armstrong Insurance.
 
Armstrong points out, however, that brokers can always recommend an easy way for consumers to offset costs, if premiums do end up being higher for electric cars than gas ones.
 
“It’s possible that we could have ‘kickbacks’ from the provincial or federal governments for environmentally friendly vehicles,” he said.
 
Brokers who do want to push “green” vehicles may want to invest the time in researching tax credits, in order to soften the pushback that might accompany higher rates.

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