Hybrids Mean More Insurance Incentives
The feel good factor is undoubtedly higher for hybrid car owners. They are normally very proud to advertise the fact that their car saves them a lot of gasoline every year and is environmentally friendly as well. One common complaint however that you may hear once in a while is that hybrid owners experience insurance prices that are either the same as they are for a regular car, or prices that are slightly higher than that of a non-hybrid car of the same model.
Recently, some insurance companies decided to give hybrid owners a discount on their premiums. This is most probably a marketing plan to get more hybrid car owners to switch to these companies, but all the same they are saving consumer’s money in the long run. The first company to offer this discount for hybrid owners was Farmer’s Insurance. The media made a big issue out of this new discount, which comes in at a straight 5% off of the regular premium price. This discount is given for all fuel alternative vehicles, including hybrids.
Farmer’s Insurance says that they are simply trying to reward drivers who are environmentally responsible. It is not surprising that this Los Angeles based insurance company is following the West Coast trend on hybrid incentives. In the town of Los Angeles, all hybrid car owners are offered free parking at meters. A clean air law may also come into effect in the state of California while they attempt to pass several new vehicle laws. With Farmer’s insurance being involved in these issues, it is only acceptable that they offer an insurance incentive as well. With more than 25,000 hybrids registered in California alone, there is no doubt that the community will start taking full advantage of these insurance incentives.
Although Farmer’s Insurance is the only company offering a hybrid incentive right now, more will certainly follow. When insurance CEOs were asked this question they all agreed on why more companies were waiting to offer incentives. Most insurance companies only get to insure a handful of hybrids now, making it rather difficult for them to predict how hybrids will fair in the claims department over time. The companies feel it is a bit to early to start giving any opinions about these cars, and way too soon to begin offering incentives without having proper statistics in hand.
Another thing that insurance companies must look at is that the consumers who are buying hybrids are most probably a “safer” group as a whole. Considering it is known that most of the buyers are interested in saving gasoline money, insurance companies are wondering if they can assume that these drivers are generally just more concerned. With a more concerned driver, they can anyway expect that there will be fewer claims filed on their policies whatever the vehicle.
However, most insurance companies admit that over time, if there are definite trends shown of fewer hybrids filing claims, then prices will most likely go down. In turn, if the claims involving hybrids increase, the premiums will go up. Right now though, there is too little information to make any type of adjustments for hybrids.
Manufacturers however think that hybrids will continue to gain momentum in the market and they expect sales to double. Therefore, there will obviously be more hybrids being insured. Eventually, insurance statistics can accurately show whether or not insurance discounts can logically be applied.
But certainly, drivers living in the Los Angeles area will continue taking advantage of the hybrid incentives offered by Farmer’s Insurance. The insurance incentive offered will be considered an extra perk or reward for driving a vehicle that cares for the environment. But this will not be the deciding factor for those in the market looking to purchase a new car. It will just be added incentive for someone already shopping for a hybrid. However, it looks like with parking incentives, employer’s incentives, tax incentives, and now insurance incentives, there has to be a point of persuasion. If somebody logically looks at all the perks and rewards of owning a hybrid, then they will be more likely to purchase one.