Posted: 09/06/2009 - 8:07 PM ET
Electric Car Insurance Discount: Reality or Myth?
2010 Toyota Camry Hybrid is actually $650 more expensive to insure than the gas-only model even with the "standard" 10 percent discount for alternative fuel and electric cars. Why?
- All car insurance rates are built on risk profiles. The lack of long-term crash data on electrics automatically raises their standing in the risk category.
- These cars, due to their unique engineering, carry higher repair costs and require non-standards parts that are often not readily available to the standard repair shop.
- Smaller vehicles and electrics are highly susceptible to theft and, in the event of an accident, are more likely to be totaled, resulting in high expenses for the insurance company.
The up-front money savings on an alternative fuel vehicle will be from fuel savings. Drivers who want to save on the cost of insuring these vehicles will find themselves seeking the usual corollary discounts desirable to all drivers based on such things as age, driving record, occupation, and club or union memberships.
Other saving measures to consider include:
- Have all your insurance policies (home, auto, life, and health) with one company. Discounts for multiple policies are an industry standard.
- Pay for your car insurance policy six months at a time. Companies apply a charge for processing statements that can total $60 a year.
- Consider a "pay as you drive" policy, a good option for drivers who routinely use mass transit or alternative forms of transportation. These policies can lower premiums as much as 50 percent.
- Investigate qualifying for a low mileage discount. The amount varies by insurer and proof of miles driven will be required.
- Coverage for towing adds $30 a year to your insurance costs. If you are in an accident, however, towing is included in the collision coverage. Can you manage not to run out of gas or lock your keys in the car and skip the extra towing benefit?
- Do you need coverage for car rentals? That adds $40 to your policy and you can rent cars for as little as $20 a day in the event of an emergency.
- Get the standard discount for your car's alarm system or GPS tracking service. If you have comprehensive coverage as well as security systems onboard, you will qualify for an additional security discount.
- The LoJack Theft Recovery System will net you a car insurance discount of 30 percent from some insurers.
Receiving an electric car insurance discount sounds good, but in practice, it's a myth. This is not to say, however, that there are not truly viable reasons for going with an electric, both financial (in terms of fuel costs) and environmental (greatly reduced emissions). Regardless of the car you drive, however, understanding the available car insurance discounts and negotiating for them is still the best way to save on your car insurance expenses.