One of the most challenging aspects of driving the newest technology is the uncertainty presented by the insurance industry. Some car insurance companies have embraced hybrid cars and their drivers for specific reasons. When the driver has a good driving record, finding affordable auto insurance is no more difficult than for a traditional vehicle. All insurance rates are based on the driver’s profile, specific risk indices, and the insurance industry’s position on the perceived risk.
Driver Profile
All car insurance rates are directly affected by a standard profile created by the insurance industry. Certain characteristics are grouped and then studied over time to see which groups of people prove to be a lower risk to the insurance company. When evaluating hybrid car owners these factors have determined a certain trend in the people who have purchased hybrid cars.
- Age – Hybrid car owners tend to be older than drivers of traditional automobiles. This classification works to the advantage of the driver because age is associated with experience and responsible driving habits.
- Driving Record – Most drivers who own hybrid vehicles have very safe driving records without moving violations or accidents. Long driving records without incident translate into lower risk for the insurance company.
- Driving Habits – Hybrid car owners tend to stay closer to home and use the hybrid vehicle for errands closer to home. Fewer miles are logged by some hybrid owners, which means that the cars are not on the road as much.
- Aversion to Risk – Drivers of hybrid cars are believed to avoid behaviors that would create risk while driving. Cell phone usage and other distracted behaviors that draw attention from the road are avoided by this group of drivers. Because of the careful focus on the driving effort, these drivers are less apt to have collisions.
- “Safe” Driver Classification – When a driver switches from a traditional vehicle to a hybrid and stays with the same auto insurance company, the insurer will track the original classification of the driver. More drivers in the “safe” category are switching to hybrids than from other classes of drivers.
- Preferred Class – Large insurance companies maintain various classes of drivers to offer lower rates to certain groups of drivers who have proven to be lower risks to the company. More drivers in the preferred class have moved to hybrids than from any other classes.
Rate Composition
All auto insurance rates are figured using three separate indices to evaluate each make and model separately in comparison to other cars on the road. Each model will be assigned a grade from “A” through “F” in each of the three categories. The assigned value for each grade is then used to calculate the annual insurance rate for that make and model of automobile. To find the best hybrid auto insurance rates, compare the hybrid models to each other, and also compare each hybrid to its traditional counterpart.
- Collision Damage – A brand new car model is given a grade based on the vehicles in similar classes. As collision statistics are gathered through claim records, the grade will move up or down the scale and directly affect the insurance rates for all owners of that same make and model of vehicle.
- Damage Theft – Hybrid car models are not considered any more appealing in the secondary market than their traditional counterparts so this index does not weigh heavily in the hybrid insurance market.
- Liability Rating – This index weighs very heavily on the insurance rate of every vehicle because the value makes up fifty percent of the insurance rate. Hybrid vehicles are currently receiving better liability grades because of the driver profiles.
Insurance Company Trends
Insurance companies follow the trend setters into a given automobile sector. Two insurance companies led the way into the hybrid market with modest discounts for hybrid vehicles. Other insurance companies are waiting for more data to be gathered before offering insurance for hybrid vehicles. The acceptance of hybrids within the insurance industry varies widely.
- Skepticism – Many insurance companies openly state their disbelief in the notion that hybrid cars and their drivers present a lower risk. These insurers are currently offering insurance at higher premiums for hybrids.
- Repair History – One of the questions concerning hybrids is the repair records over long periods of service. When cars are repaired often, many drivers will sell the car and the insurance pool shrinks which directly impacts the sector of the auto insurance industry.
- Car Components – Some insurance companies are actively seeking information concerning the impact the electrical system in a hybrid has at the scene of an accident. The information that would define the risk level for additional cost and damage is insufficient with only four model years of information.
- Non-Existent Proof – While two of the largest insurers claim to see a trend in the driver’s profile, the other insurance providers are not convinced of the trend.
- Great Opportunity to Capture Market – The most optimistic insurers have jumped out in front of their competitors to capture as much of the hybrid market as possible. These insurance companies believe there is more to be gained in the earliest stages and desire to set the stage by offering discounts to grow their insured pools.
When to Buy Affordable Hybrid Car Insurance
The best time to seek out affordable auto insurance is prior to the purchase of the vehicle. Take some time to contact a reputable insurance agent and ask some pertinent questions about the acceptance of certain makes and models of hybrids. Inquire about the index grades for each model in comparison to the traditional counterpart. Research the repair and accident records for the make and model to determine the safest hybrid to own.
Author Bio: Jenna is a personal finance writer and contributor to a website for finding cheap car insurance quotes and a website for reviewing auto insurance providers. When she is not writing and researching she enjoys taking road trips with her husband and 2 kids.
