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Bengt Halvorson
Quite a few big-name auto insurers have been giving hybrid owners a discount on their premium. But those deals might not last much longer; as an insurance data-analysis firm points out, the insurance industry could be losing big because of this.
The surprising result: Hybrid drivers typically drive farther, get more tickets, and have significantly more expensive insurance claims.
San Francisco-based Quality Planning analyzed the driving habits of about 360,000 vehicle owners and found that hybrid owners drive up to 25 percent more than non-hybrid owners.
The firm looked at several common use categories used by insurers—including "pleasure use" (everyday driving) and "high commute" (commuting more than 15 miles a day). The long commuters traveled about the same distance whether they drove a hybrid or not, but the everyday drivers of hybrids drove about 25 percent (2,000 miles) farther than those of non-hybrids—largely offsetting any petroleum savings.
For some hybrid owners, the decreased guilt associated with improved fuel-efficiency might actually increase the number of pleasure trips. "High mileage drivers appear to be attracted to these vehicles, so insurers should take steps to verify the intended use of hybrids and validate actual miles driven whenever possible," said Dr. Raj Bhat, the president of Quality Planning.
Looking at moving violations, Quality Planning found that Toyota Prius drivers get 0.38 violations per 100,000 miles driven, compared to an average of 0.23. Collision loss costs are also much higher for hybrids—with comprehensive coverage loss about 17 percent higher than average. Furthermore, two—the Toyota Highlander Hybrid and Ford Escape Hybrid—have among the highest collision loss costs. For 2006 hybrid models, the costs to the insurer of comprehensive coverage were 75 percent higher than average.
Even if the hybrid discounts that insurers are giving help attract new business, chances are they aren't so fiscally sound overall. "A 25-percent increase in miles driven or a 30-percent differential in loss costs is very significant," said Bhat.
[QualityPlanning.com, via AllCarsElectric.com]
2010 Toyota PriusEnlarge Photo Quite a few big-name auto insurers have been giving hybrid owners a discount on their premium. But those deals might not last much longer; as an insurance data-analysis firm points out, the insurance industry could be losing big because of this. The surprising result: Hybrid drivers typically drive farther, get more tickets, and have significantly more expensive insurance claims. San Francisco-based Quality Planning analyzed the driving habits of about 360,000 vehicle owners and found that hybrid owners drive up to 25 percent more than non-hybrid owners. The firm looked at several common use categories used by insurers—including "pleasure use" (everyday driving) and "high commute" (commuting more than 15 miles a day). The long commuters traveled about the same distance whether they drove a hybrid or not, but the everyday drivers of hybrids drove about 25 percent (2,000 miles) farther than those of non-hybrids—largely offsetting any petroleum savings. For some hybrid owners, the decreased guilt associated with improved fuel-efficiency might actually increase the number of pleasure trips. "High mileage drivers appear to be attracted to these vehicles, so insurers should take steps to verify the intended use of hybrids and validate actual miles driven whenever possible," said Dr. Raj Bhat, the president of Quality Planning. Wrecked Toyota Prius owned by Elizabeth James, photo by Ted James, from Houston PressEnlarge Photo Looking at moving violations, Quality Planning found that Toyota Prius drivers get 0.38 violations per 100,000 miles driven, compared to an average of 0.23. Collision loss costs are also much higher for hybrids—with comprehensive coverage loss about 17 percent higher than average. Furthermore, two—the Toyota Highlander Hybrid and Ford Escape Hybrid—have among the highest collision loss costs. For 2006 hybrid models, the costs to the insurer of comprehensive coverage were 75 percent higher than average. Even if the hybrid discounts that insurers are giving help attract new business, chances are they aren't so fiscally sound overall. "A 25-percent increase in miles driven or a 30-percent differential in loss costs is very significant," said Bhat. [QualityPlanning.com, via AllCarsElectric.com]
Responses (12 total)
By R2dad #1, Posted: 7/16/2009
Well, well, well. Seems there might be something to the Prius driver = retard. Maybe they're too busy telling everyone else how to drive, hypermiling, talking on their phones and tweeting their favorite environmental lobbyist!
By TinCan #3, Posted: 7/17/2009
This makes me so glad that Mr. Obama is forcing GM and Chrysler to make these POS vehicles. The next thing you know, they'll be regulating auto insurance as well.
By fredct #4, Posted: 7/18/2009
Hmmm, which is more likely, that hybrids make people drive more? Or that people who need to drive a lot get more benefit from hybrids and are therefore more likely to drive them?
The latter seems to be much more logical, yet the author pays it only lip service is his attempt to bash hybrids at any cost. Please.
By Bengt Halvorson #5, Posted: 7/18/2009
Fredct, I think an even more appropriate question to be asking here (from the insurance standpoint) is, to what degree are hybrid owners forgoing trips and mileage in less fuel-efficient vehicles, in favor of their hybrids? And is that getting that likelier heavier vehicle, that might do more damage to other vehicles in an accident, off the road worthwhile to insurers as a whole? It's likely that this is at least part of the reason for the disparity in casual use, but unfortunately insurers won't be able to account for this until they more accurately track use, and on a state-by-state basis that's an entirely different can of worms.
By Deano #6, Posted: 7/20/2009
This seems to reinforce the notion that the Prius attracts drivers that are self-centered, elitists who just don't care all that much about learning to drive within the bounds of legality.
By 4TimesAYear #7, Posted: 7/20/2009
I don't think the insurance companies are going to stop giving them a break; they'll just raise our insurance. You know, just like they make insurance possible for drunk drivers by raising ours.
By CK Dexter Haven #8, Posted: 7/21/2009
I think a hybrid owner sneaked into my home last night and left the toilet seat up.
I am curious though, why would anyone bother bashing hybrid owners?
By Alex #9, Posted: 7/21/2009
As for fredct's point about hybrid use decreasing use of non-hybrid / larger vehicles: yes, the article would be a lot more informative if there were also stats available on liability claims for hybrids, not just comprehensive claims. However -- the higher rate of moving violations per 100K miles driven means that there's something more involved here than just people taking the Prius out for errands instead of the Outback (or whatever).
Don't get me wrong, I do admire Toyota for its technological achievement of building a car that's powered by smug self-righteousness and passive-aggression. But yeah: there's definitely something about the kind of people who tend to be drawn to a vehicle that costs that much and still gets lower gas mileage than a 20-year-old Honda CRX.
By Brian #10, Posted: 7/21/2009
Well from dealing with them all around the country we have come to call them Pious drivers. For they all want to be seen stuck in the fast lane doing the speed limit and refusing to yield the lane and I love the look on their face when you pass them. I did not know that having a Hybrid makes you better than us or the moderator of the road way.
I know that with each generation they Hybrid should be improving but when you see a TDI Jetta getting better mileage it’s amusing. And I have remember the old CRX great gas mileage and hell of fun to drive.
Question for all the smugness of the Eco side for the Hybrids What are going to do with all these battery packs in the coming years from the Hybrids and the environmental damage and cost of making those batteries?
Sorry for the ramble just my 2 cents
By Karen #11, Posted: 7/21/2009
Wow, I had no idea there was so much hostility out there for hybrid drivers. I bought my Prius four years ago, long before all this "force green down everyone's throat" stuff began, for economic reasons (my husband had a gas guzzler and we needed an economical car to offset it). I really love my car, but now I feel a little self-concious about how we are being perceived. The stats in this article don't surprise me since we do drive the Prius almost all the time, just as if it was our only car. But we are NOT eco-nazis and I hope we don't start getting descriminated against for buying a great car.
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