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Will Owning A Hybrid Get You Low Cost Auto Insurance?
By Kade Phillips
When they first appeared on the roads, people were puzzled. The cars were very different from their gas guzzling predecessors - even looked different. Word began to spread, and today, a nation is convinced: hybrid vehicles have a bright future.

With their efficient fuel economy and environment-friendly operation, hybrids have captured the imaginations of an entire generation. In October 2005, the public was given another reason to considering purchasing one: discounts on auto insurance rates. During that month, Farmers Insurance Group of Companies announced a broad 5% reduction in auto insurance premiums for all policyholders who drove hybrids. They became the first insurance company in the U.S. to do so. In February of the following year, Travelers Insurance Company launched an across-the-board 10% discount on their auto insurance rates for drivers of hybrid vehicles.

Today, millions of other drivers, insured with different auto insurers wait anxiously for their own premiums to be reduced. As hybrids become more popular each year and their number continues to grow on the road, other insurers are likely considering making similar moves in their customers' rates. Below, you'll learn why Farmers Insurance and Travelers Insurance lowered their rates, why other insurers have not yet done the same and the outlook for hybrid owners' auto insurance premiums in the years to come.

Reasons Why Low Cost Auto Insurance May be Available for Hybrids

Auto insurance companies calculate the rates they charge their policyholders based upon a set of criteria. These can include the age of the driver, driving record, aversion to risk while driving and other factors. If they offer a policy to a driver of a normal vehicle, they use formulas to determine what the likelihood is for that driver to make a future claim. Drivers who are considered "safe" or less likely to be involved in any activity for which a claim can be made are offered a policy with lower cost premiums.

Experts in the auto insurance industry claim that the reasons why some insurers can offer low cost auto insurance rates to those who drive hybrids is due to their driving profiles. In effect, the assumption is that people who drive hybrid vehicles are likely to take less risks on the road. They're considered more safety-conscious than their peers who drive non-hybrid cars. Further, drivers of hybrids tend to be older than drivers of other classes of vehicles. These people can be placed into a "preferred class" by their auto insurer. They're

considered "better risks" who are less-likely to make claims in the future. The lower the likelihood of claims from a driver, the lower the premiums usually extended on the policy - therefore, low cost car insurance may be possible from certain auto insurers.

Why Some Auto Insurers Won't Cover Hybrids

Despite the attention-getting moves made by Farmers Insurance and Travelers Insurance, many auto insurers are leery of lowering rates for their own customers who drive hybrids. They contend that hybrid vehicles are still relatively new. They're more likely to need repairs. Plus, hybrids use different electrical components than do non-hybrid vehicles. Auto insurers such as State Farm have argued that these electrical components may cause harm in the event of a traffic accident. Combined, some car insurance companies claim that there is not sufficient evidence that definitively shows that hybrid cars and the people who drive them pose less risk to the insurer. So, depending on your insurer, low cost car insurance may or may not be available to you.

The State Of Auto Insurance For Hybrids

Hybrid vehicles continue to gain popularity. This is due to their efficient fuel economy (arguably a very attractive feature as gasoline prices rise), and the fact that hybrids are far more friendly to the environment. Many drivers want to avoid cars that burn fuel and add pollution. So, they purchase a hybrid. Federal tax credits for drivers of hybrid cars may also be a motivator. As more people begin driving hybrids, it's likely there will be increased pressure for other auto insurance companies to lower rates. Ultimately, many insurers may feel compelled to follow the lead of Farmers Insurance and Travelers Insurance in offering low cost auto insurance to hybrid owners because none of them want to be seen as environmentally insensitive. There's a lot to be gained by an association with a good cause.

Did you know that weather you own a hybrid or not, auto insurance rates can vary significantly from one insurer to another. Only by shopping around for your car insurance coverage and getting quotes from multiple insurance companies will you know whether you are getting the best possible rate. Donít pay any more than you have to - shop around for your low cost car insurance policy. If you have a few minutes, compare your current auto insurance rate with multiple competing offers right now. Click on: low cost auto insurance to get started. It could be the best 5 minute investment decision you make all year.
Kade Phillips is a contributing writer for Kanetix.com, a powerful free Insurance Quote Comparison Service. Find out how to lower your car insurance bills. Visit us for Auto Insurance Quotes, Low Cost Auto Insurance and Low Cost Car Insurance.

We strive to provide only quality articles, so if there is a specific topic related to insurance auto that you would like us to cover, please contact us at any time.

And again, thank you to those contributing daily to our new auto insurance resources.

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