Top Auto Insurance Companies Watching Trends in Green Vehicles

One issue that top auto insurance companies will be exploring in the next several years is what, if any, specific policies they will introduce in response to what is expected to be a larger number of electric vehicles on the nation's highways.

Starting in 2010, a number of the world's leading automakers, both in the U.S. and overseas, are expecting to begin stepping up their production of electric vehicles, although it remains to be seen if this will prove to be a long–lived trend for the automotive industry.

The Chevrolet Volt is one of the highest–profile examples of a mass electric vehicle rollout set for 2010, as well as the Nissan Leaf. Some companies are also working on high–end electric vehicles that have been generating a share of media attention.

Green Vehicles Become Less Expensive

Electric vehicle technology has become increasingly sophisticated and is becoming more affordable, but one problem facing prospective drivers is the lack of a charging infrastructure, especially when it comes to traveling long distances across the country or far away from major cities. The lack of a widespread, high-profile network of charging stations may be one of the biggest factors keeping demand for electric vehicles smaller.

Still, this is likely to become less of a problem as demand for electric vehicles continues to grow and as charging technology and infrastructure becomes more sophisticated.

With that in mind, a recent Associated Press article quotes Nissan/Renault CEO Carlos Ghosn as predicting that 10 percent of vehicles sold in 2020 will be electric–powered, with the remainder being powered by fuels ranging from gasoline to diesel and more.

The AP quoted him as saying that instead of taking "the market by storm," electric vehicles will "complement oil."

Another example of the emerging potential for electric vehicles comes from Florida. There, a report from WPEC-TV in West Palm Beach notes that the state now offers a $5,000 rebate for people who take their current hybrid vehicles and turn them into plug-in hybrids that run on electricity.

The television station quoted one owner as saying that he had filled his vehicle with gasoline only three times in about nine months after having it converted to use the plug-in technology.

Green Vehicle Pros and Cons

For electric vehicles, one unique safety issue that has been raised is their lack of sound, which could pose some degree of danger to pedestrians and cyclists. Some research is actually underway focusing on potential sounds that can be programmed into the vehicles for tasks such as backing up.

However, some insurance companies have determined that owners of hybrid vehicles are statistically safe drivers who are less likely to file major claims. This has resulted in a number of insurers offering discounts to hybrid drivers.

The insurance industry has also been concerned about the prospect of massive financial losses in the future brought on by possible climate change, which has provided further momentum for incentives to reward customers who choose to go green. This can range from discounts for hybrids to the growing trend of pay as you go insurance, which allows people who drive the least to save the most money. The trend has also made its way into the world of homeowners insurance as well, with some companies offering discounts to customers to invest in various green features.

For people who don't have a hybrid or electric vehicles, there are still benefits. Many of the top auto insurance companies offer discounts for people who work from home or drive less than a certain number of miles in any given month.