Hybrid Cars Insurance Incentives

Hybrids Bode Well for Insurance Incentives

Those driving hybrids usually have very few complaints when it comes to their vehicle. Most hybrid owners will proudly inform anyone of the massive amounts they save in gasoline each year as well as the great impact their hybrid has on the environment. They love that their car feels like a regular car, but is less expensive at the pump and less harmful to the air. One complaint however that you may hear from time to time is that hybrid owners are experiencing insurance prices that are either the same as they are for a regular car, or prices that are slightly higher than for a regular car of the same model.

Just recently a few insurance companies have decided to give hybrid owners a discount on their premiums. This is likely a marketing plan to get more drivers to switch to these companies, but nevertheless they are saving consumer's money in the long run. The first company to offer a discount for hybrid owners is Farmer's Insurance. The media made a huge issue out of this new discount, which comes in at 5% off of the regular premium price. The discount applies to all fuel alternative vehicles, including hybrids.

Farmer's Insurance states that they are only trying to reward those drivers who are being environmentally responsible. It is not a surprise that this Los Angeles based insurance company is following the West Coast trend on hybrid incentives. The town of Los Angeles offers free parking at meters for all hybrid owners. A clean air law may come into effect in the state of California as they attempt to pass several new vehicle laws. With Farmer's insurance being in the middle of these issues, it is only acceptable that they offer an insurance incentive as well. With over 25,000 hybrids registered in California, there is no doubt the community will start taking advantage of these insurance incentives.

Although Farmer's Insurance is one of the only companies offering a hybrid incentive at this time, it is certain that more will follow. When insurance CEOs were questioned they all agreed on why more companies were waiting to offer incentives. Most insurance companies only insure a handful of hybrids at this time, making it difficult for them to predict how they hybrids will fair in the claims department over time. The companies feel it is a bit soon to start giving any opinions about the car, and way too soon to begin offering incentives without proper statistics available.

Another thing insurance companies must look at as well is that the consumers who are buying hybrids are probably a "safer" group as a whole. Considering it is known that most buyers are interested in saving money on gasoline, insurance companies wonder if they can assume that these drivers are just more concerned in general. With a more concerned driver, they can expect that no matter what they drive, there will be fewer claims filed on their policies.

Most insurance companies admit that over time, if there are trends shown with fewer hybrids filing claims, then prices will likely go down. In turn, if there are more claims involving hybrids, the premiums will rise. At this time however, there is just not enough information to make any type of adjustments for hybrids however. Manufacturers feel that hybrids will continue to gain momentum in the market however and expect sales to double. Therefore, there will be more hybrids being insured. With time, insurance statistics will accurately be able to show whether or not it insurance discounts can logically be applied.

Certainly however, drivers who live in the Los Angeles area will be taking advantage of the hybrid incentives offered by Farmer's Insurance. The insurance incentive offered will likely be seen as an extra perk or reward for driving a vehicle that does not damage the environment in the same way a regular vehicle does. It will not likely be the deciding factor for those in the market for purchasing a new car however. It will just sweeten the deal for someone already shopping for a hybrid. However, it seems that with parking incentives, employer's incentives, tax incentives, and now insurance incentives, there must be a point of persuasion. If someone logically looks at all of the perks and rewards of owning a hybrid, then they will likely choose to purchase one.