Getting Lower Insurance Prices By Getting A Green Car
Over the past years, car insurance has changed significantly. Since the Toyota Prius debuted to the Japanese market in 1997, worldwide hybrid sales have gained momentum each year. The sales have been rising dramatically, mainly due to increased confidence in the new hybrid engines. Initially, a large percentage of people purchased a hybrid for the tax deductions that were available. Others were motivated by a desire to be more environmentally conscious. Others were simply interested in saving money through lowered fuel usage.
A lot of the early drivers of hybrid cars also received a lower car insurance rate than the average population. Farmers & Travelers Insurance were the first of insurers to give discounts for owning hybrid cars. The reason for lower rates is that hybrid car owners are thought to be less risky drivers than most people. Beneath we will show you why a hybrid vehicle is thought to save more money on auto insurance policies. We’ll also describe how the current narrative regarding hybrids is changing, and why the latest chapter in automotive technology presents an interesting twist.
Green Vehicles From Your Auto Insurer’s Perspective
In the past, hybrid drivers were considered as safer than normal and not very likely to end up in car accidents. They were thought to make smarter choices while driving. Because they presented a lower risk of insurance loss to the insurer, these policyholders were often given discounts on their rates.
Even though some insurance companies held this belief dearly, others flat out rejected it. While Farmers and Travelers spearheaded the movement toward lower premiums for hybrid owners, many insurers refused to reduce their rates. Some firms actually demanded higher premiums for the hybrid drivers. Since the new technology came at a higher cost, the insurance premium also had to be increased to cover the expensive new parts of the hybrid engine. This is precisely why it’s highly advised to compare multiple insurance quotes from a variety of insurance firms. Hopefully, this illustrates clearly that different firms interpret a driver’s risk level differently.
The general characteristics of your typical hybrid car driver have changed a bit over the last few years. This reveals another side of the story that will influence auto insurance rates in the coming years.
The Other Side Of The Story
Mitchell International released a large report in the second half of 2010. Something worth mentioning about this report was the information about the hybrid cars. The report revealed that hybrids posed an average claims cost that was 6.5 percent higher than that posed by vehicles equipped with conventional fuel-powered engines.
The report’s second surprise involved the profile of a typical hybrid owner. These drivers were either belonging to the early adopters stereotype or the green-friendly. On average, they made better choices about their driving habits. Recently however, this profile has grown into a separate market segment that is marketed mostly by the fuel savings. Many of these newer owners endure long commutes. Because there’s more driving to be done, they are more likely to be involved in an accident.
Together, these two factors – higher claims cost and an evolving owner profile – are likely to cause an increase in premiums for many hybrid owners. There is an additional facet to this story, however, that is just beginning to surface.
An Uncertain Future Highlights The Value Of Price-Shopping
A new round of electric cars is starting to appear recently. One of the top ones right now is the Nissan Leaf, but there are several other competitors already such as the Chevrolet Volt. Just like the hybrid generation, these cars are important to keep in mind because they could have low insurance rates initially. The environmentally conscious will probably be among the first to buy these cars. Therefore, drivers with all-electric vehicles might receive some initial insurance discounts. The takeaway is that nothing is certain with regard to auto insurance rates for “green” car owners. Although some insurance companies will be offering discounts, others might ask for a premium. It’s a good idea to compare more than one provider. Compare quotes between several car insurance companies to ensure you enjoy the lowest rates possible for the coverage you need.
It’s important to comparison shop when searching for an assurance quote. At Kanetix, in under 5 minutes, you can find the lowest automobile insurance quote.