Auto insurance premiums – high rates because of hybrid car repair cost


A recent report was presented by Mitchell International Inc., an automotive industry information provider, that costs of repairing a hybrid car as well as the changes in their owners’ attitude will possibly heighten auto insurance premiums.

18The contribution of hybrid cars to the effort of car companies to help reduce global warming and save natural resources such as oil is rewarded by auto insurance companies with lower premiums. During the time of its popularity, auto insurance companies help in promoting its quality through providing discounts and other marketing strategy for customers to choose them over regular cars that use gas. Also, auto insurance companies are comfortable with providing this privilege to policyholders because with their study and research on owners of hybrid cars, they have a more positive outlook on upholding the good reputation of hybrid cars and that includes good driving habits. Owners tend to be more careful when on the road, auto insurance companies claim.

Recently however, this type of behavior is rarely seen on drivers of hybrid cars said Greg Horn, the vice president of Mitchell International Inc. Auto insurance companies have conducted studies and monitored the behavior of hybrid car drivers on the street. Auto insurance companies’ data showed that the rate of receiving a traffic violation of a hybrid car owner and a regular gas-fueled owner In fact, their violations and the receipt of a driving ticket are higher than a person who drives a regular car. The impact of this on auto insurance companies is that hybrid cars’ risk rank to accident and collision has climbed several notches up. So, with increased risk, car insurance companies said that it would only be reasonable if they increased the car insurance premium or removed discounts so they can save their investment. It is a business, after all.

Mitchell said that the cost of repair of a hybrid car is much more expensive than a similar gas-fueled vehicle. Most auto insurance companies have DRP or direct repair program where policyholders are referred to a repair shop that is affiliated and has a contract with the company. These companies offer after market parts or use car parts that are not the same as the car’s manufacturer. This is one way insurance companies can save up. Now, hybrid cars delicate cars and they prefer to have original parts. Original parts are much more expensive and are only found in affiliated manufacturer stores. Having this high cost, it really affects the cost for car insurances.

As much as auto insurance companies maintain their premium rate for hybrid cars, studies are compelling them to do otherwise. If they were to stick with the original rate as well as discounts, they would lose profit also because hybrid cars are often bought and used in high-risk areas such as urban areas as Horn claims.