There are many reasons to purchase a hybrid or electric car: saving money on gas, reducing your carbon footprint, or a change in lifestyle. Going green can be beneficial for the environment and your wallet. One of the ways to help save money is with the green car discount on your insurance premium.
The green car discount is offered to owners of electric and hybrid vehicles. The discount will vary between carriers and between states, but can range between five and ten percent. That’s a significant reduction in your premium rate, especially when combined with other discounts offered by your car insurance carrier, like the good driver discount, multi-car discount, and concurrent life insurance discount.
Insurance companies consider green cars to be motor vehicles with alternative fuel methods that have a reduced carbon footprint. This includes hybrid electric vehicles like the Toyota Prius, plug-in hybrid electric vehicles like the Chevrolet Volt, and battery electric vehicles like the Nissan Leaf and the Tesla line of vehicles. Each of these cars uses less gasoline than a standard car, or sometimes none at all.
Hybrid and plug-in electric vehicles are becoming increasingly common on the market place. There are more automakers developing green cars and more people buying them. Part of the reason why buyers want hybrid and electric cars are the financial incentives, whether it be government tax rebates, less money spent at the fuel pump, or insurance discounts.
You may be wondering why owning an electric or hybrid car would qualify you for a discount. Insurance carriers believe that drivers who go green generally make other responsible choices too. Insurance carriers believe that owners of hybrid and electric vehicles are usually more careful on the road than operators of standard vehicles. Green cars themselves aren’t necessarily safer to drive, however insurance companies believe that the drivers of green cars are.
It should be noted that the notion that green car owners are safer drivers is not always correct. In fact, hybrid and electric car drivers are more likely to collide with a pedestrian or bicyclist. This is likely due to the quieter nature of green cars; pedestrians and bicyclists may not always hear the car, while the driver may not realize their silent approach.
Another reason why insurance companies offer a green car discount to hybrid and electric vehicle owners is because research reveals that they drive fewer miles. Whether this is due to the limitations on car battery life or other factors, fewer miles on the road means a decreased exposure to risks. This means that you will potentially be involved in a lower number of accidents and make fewer insurance claims.
Keep in mind that each insurance company’s green car discount will be different. Some carriers offer a discount off your entire annual premium, while others do not include a discount to your uninsured motorist coverage, personal injury protection coverage, or other aspects.
Also, your rate may be set higher to start based on other risks related to hybrid and electric vehicles. For example, green cars may be more expensive to fix after an accident, or may be more likely to be totaled. This results in a more expensive payout for the insurance company. As stated by IMT group, “Hybrid vehicles overall have…a 6.5 percent, or $182, higher average claim severity than gas-powered vehicles, according to a Mitchell International Inc. study.” Insurance companies anticipate such a loss, and therefore your rates might be higher.
Speak to Your Agent
Talk with your independent insurance agent today. They have the knowledge and experience to provide you with additional information about their green car insurance rates and discounts.
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