Hybrid Vehicle Auto Insurance Discount: Save on Auto Insurance (2024)

Driving a hybrid vehicle is good for the environment. There is little debate about that. Many people, however, also by hybrid or alternative fuel vehicles because they are a good investment.

The United States government offers many tax incentives to people willing to make the switch to hybrids. Apart from the tax benefit, you will also see a drastic drop in your monthly gas bill. What people don’t realize is that there is also an insurance discount available to hybrid drivers.

Insurance Discounts For Hybrid/Electric Car Drivers

Toyota Prius Life (ZVW30) front-2 20110116” by M 93 – Self-photographed. Licensed under Attribution via Commons.

An increasing number of insurance providers are offering insurance discounts to Eco-friendly citizens who are driving alternative fuel or hybrid vehicles.

The reason for this is that hybrid drivers tend to be more responsible, more educated, have stable jobs, and are less likely to be involved in accidents (because they drive less).

In addition, most hybrid owners tend to be men and women in their 40s and 50s, which happens to be another “plus” in the eyes of insurance companies. Drivers like these end up in the “preferred” category, which receives the best insurance rates.

The following insurance companies are just a few of them who offer said discounts:

• Travelers – 10% discount
• Farmers – 10% discount
• Geico – 5% discount
• Allstate – undisclosed discount
• Liberty Mutual – undisclosed discount

While this discount does not seem too significant, realize that the average insurance rate for families in America is over $400 per month (close to $5,000 per year).

Which insurance rates increasing each year, that 10% discount from Travelers, for example, could be significant. If your family hovers around the average insurance rate in the USA, you could be looking at $400 or more in savings per year.

Hybrids Do Not Always Equal Lower Insurance Rates

It is important not to assume, however, that you will be automatically paying less for insurance simply because you choose to drive a hybrid or alternative fuel car.

Realize that these cars are often much more expensive to purchase than your average vehicle. Additionally, they are cost significantly more money to repair. While you may receive a 10% or 5% discount on top of your base insurance rate because it’s a hybrid, your actual base insurance rate might quite steep.

Also, realize that expensive cars naturally cost more to insure than inexpensive cars. A new Toyota Camry that is not a hybrid may cost $18,000. A new Toyota Camry hybrid vehicle may set you back nearly $30,000.

Because the vehicle is much more expensive, the hybrid owner will end up paying 25% to 40% more on their insurance premiums. This rate increase won’t be because they are driving a hybrid, it will be because they are driving an expensive car!

Hybrid vehicles, an additional study suggests, might actually be more likely to be involved in collisions with pedestrians and bicyclists. Hybrids and electric vehicles often times have silent engines, which cannot be heard by people approaching on the side of the road. In addition, drivers in densely populated cities with high foot traffic tend to drive hybrids at a higher rate.

Bottom Line

Although hybrid and alternative fuel vehicles will be given auto insurance discounts, you will not automatically pay less for your insurance simply because your vehicle is eco-friendly. There are many factors that come into play when determining your insurance rates, including:

• Your Driving History
• Your Credit Score
• Your Age
• Where You Live
• What Car You Drive
• Your Gender
• Your Marital Status
• Your Coverage
• Your Deductible Amount

An important point to remember is that auto insurance is just one cost associated with owning a vehicle. With electric vehicles, costs depend a great deal on location.

In the best cities to own an electric vehicle, you can expect numerous government EV incentives, a convenient and built-out charging station infrastructure, and a low electricity cost. This means you would likely save more money purchasing an EV than a gas-powered car, even if you’d pay higher auto insurance rates.

Certainly realize that you will not necessarily be rewarded by your auto insurance company for driving an eco-friendly vehicle. But calculate the entire cost up-front before making your purchase and see whether a gas-powered vehicle or electric vehicle will save you more in total costs in the long run.