Electric Vehicles May Drive Down Your Insurance
May 22, 2012
By Rory Lidstone
TMCnet Contributing Writer
While early adopters who purchased electric vehicles have had to dish out more many than they would to buy a standard car, an article from USA Today says that these drivers recoup their losses in the form of lower insurance costs.
Insurance rates can be affected by any number of factors — driving history, local crime and vehicle theft rates — but experts are saying that owners of electric vehicles, like the Chevrolet Volt and Nissan Leaf, can generally expect a lower insurance premium.
Jack Nerad, market analyst at Kelley Blue Book, explains, "When you look at electric vehicle owners, you probably have a pretty careful bunch there. They're probably pretty mature, and they're not the young twenty something male who gets into the most fights and has the most car accidents."
Even though electric vehicles only make up a very small fraction of the current market, and will do so for years to come, insurers are apparently already starting to compete for electric vehicle policies. Hartford Insurance, for example, announced last month that it will offer a five percent discount to owners of electric vehicles nationwide by the end of 2012. While the official line is that the company wants to support going green, experts say that the company wouldn't do it unless it was a smart choice financially.
Rick Lipinskas of Albany, New York, bought a Volt in March of last year and is paying New York Central Mutual about $1,000 per year for "more than minimum coverage" plus collision and uninsured driver. In fact, the average premium for a 2012 Volt owner, who drives 15,000 miles annually, is only about $1,452 per year for the first five years, according to the True Cost to Own estimates from research site, Edmunds.com.
On the other hand, some consumers may find themselves paying more when switching to an electric vehicle, as was the case with Paul Cummings, a Phoenix-area man whose State Farm premiums went up by $204 per year after he switched from a Ford F-150 to a Volt.
According to Brittany Senary, a spokesperson for insurer Progressive, some drivers can see their premiums go up when switching to an electric vehicle, "Because newer vehicles with more expensive technology and parts generally cost more to fix ... they're generally more expensive to insure. We don't currently offer EV discounts because we cannot justify them based on our claims data."
While the debate rages on when it comes to electric vehicles, those concerned about the environment aren't likely to care too much about insurance premiums when switching.
Edited by Brooke Neuman
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