An October 2024 accident along Toronto’s lakeshore involving an electric vehicle (EV) has raised concerns among insurance and legal experts following reports a surviving passenger couldn’t free herself from the burning wreck because the crash knocked out the vehicle’s electrical systems.

News reports at the time said the driver lost control of the vehicle, which then crashed and caught fire. The driver was killed and a car-wide power shutdown meant electronically operated door levers failed. Although a manual door release existed, the rear-seat passenger who survived the crash couldn’t locate it because she wasn’t familiar with the vehicle. Unable to open the rear passenger doors, she was saved when a passing truck driver stopped, broke the EV’s window and helped her escape.

Other EV accident reports from recent years show passenger egress was an issue in similar crashes involving fires in the U.S. and Korea. The crashes have one thing in common, notes Matthew Owen, a lawyer at Zarek Taylor Grossman Hanrahan — the vehicles involved were all travelling at very high speeds.

“That means in many cases when the vehicle’s electrics failed, there may be questions about whether its occupants were dead, unconscious or too badly injured to exit the vehicle independently, even if internal exit systems had been easy to operate,” he says.

Then there’s the unusual nature of fires caused by the lithium-ion batteries in EVs, which ignite in a process called thermal runaway and are intensely hot and difficult to put out. News reports indicate the truck driver who assisted in Toronto’s October crash said the flames rose around six feet in the air. “It’s not the same as gasoline fires in normal cars,” notes Owen.

Related: Lithium-ion batteries leading to deadly fires – and lawsuits

While the relative novelty of EVs means battery fires and egress problems have been uncommon, that’s starting to change.

“Increased frequency of events whereby power-loss impacts passenger safety makes manufacturer arguments about the rarity of the events more difficult to stand on,” Owen says. “This is a problem staring the manufacturers and the safety regulators in the face because it’s not just a one-off.”

He adds that regulators’ reactions will depend on accident trends since their mandates include ensuring their actions don’t stifle innovation.

“Determining whether there are enough issues to question whether EVs are safe for Canadian roadways won’t be a quick process,” Owen says. “But you would think [it] would be something on [regulators’] radar, and you’d think it would be something that’s also on the electric vehicle manufacturing [industry’s] radar that these manual releases need to be more intuitive, obvious and available because there is a unique [fire] risk caused by lithium-ion batteries.”

In a statement to CU, Transport Canada notes under its regulatory framework, “companies are responsible for certifying that their vehicles meet Transport Canada’s safety requirements by conducting thorough testing of their vehicles and maintaining appropriate test records.”

It adds, “a number of factors may impact the ability of vehicle occupants to exit any vehicle following a high-speed, high-severity crash, including the vehicle’s post-crash condition, and potential occupant’s injuries and mobility, as well as their cognitive state.”

 

Where insurance fits in

From an insurance standpoint, many issues surrounding these types of EV crashes could fall under product liability, says Adam Mitchell, CEO of Mitch Insurance — even though the high speeds involved suggest a victim could also sue the insurance coverage of the person behind the wheel.

“The court would [likely] find contributory negligence on a couple parties [including the automaker because] it wouldn’t have been catastrophic had the doors been able to work and let [the passenger] out. So that litigator is probably going to be pointing at a number of parties and their respective insurance companies and bring them into court to let them untangle the accusations.”

In response to those claims, automakers would rely on product liability coverage.

“If [the manufacturer] got sued, then it would be product liability coverage that would respond. If the [manufacturer] wins…the insurer pays to defend them for the lawsuit, and the car is not actually found in court to be defective. If the court decides they’re not negligent, and this is a one-in-a-million accident, then that’s likely the end of it,” says Mitchell.

“If they lose, then the insurer pays damages up to the limits of the policy, and then [the manufacturer] gets to decide if it’s an issue…that [requires] recalling of the vehicles and retrofitting, or the regulator steps in and enforces a recall.”

In the latter scenario, if a manufacturer carries recall insurance coverage, that policy would be triggered.

Related: Collision claims rise for electric vehicles in Canada

Adoption rates for EVs suggest that if these kinds of accidents continue to happen, it may impact coverage costs for consumers.

Mitchell points out that take-all-comers rules ensure drivers won’t be turned down when applying for personal auto policies.

And, says Owen, “insurers will have to adapt to risks posed by a burgeoning technology. To my mind, it starts to become an underwriting problem. If nothing is done about these issues and incidents keep occurring, it could lead to increased premiums for electric vehicles.”

 

This article is excerpted from the February-March 2025 print edition of Canadian Underwriter. Feature image by iStock/SpyroTheDragon