Auto Insurance: How Going Green Can Help

Even as recently as a few years ago, going green was viewed as a potentially expensive endeavor that was best left to those who had plenty of leisure time and expendable income to devote to the hobby of doing something good for the environment. But the green movement seems to have turned a corner over the course of the last decade, bringing with it a spate of innovations designed to reduce waste and pollution even while meeting the diverse needs of consumers. As a result, the marketplace has not only become flooded with eco-friendly products; the prices have also begun to come down. And the focus on greenhouse gases (not to mention the rising price of gas) has led to the mass production of hybrid and electric cars. But while you can certainly see how these automobiles save you money at the pump and even on taxes (with tax incentives and government rebates available), you might be a little uncertain as to how going green with your driving can save you on auto insurance.

To start with, there are more ways than one to go green. Purchasing a hybrid, plug-in hybrid, or fully electric vehicle is a good start. All of these can help to cut back on the harmful emissions that cause global warming, even as they allow you to save money and reduce your dependence on petroleum products. But can buying this type of car help you save on insurance? It’s possible. Most insurance companies will charge you based largely on the value and perceived safety of your vehicle, so it really doesn’t matter if you buy a green car or not – it only matters how much you spend on it and whether or not is has two doors or four. However, eco-friendly cars thus far seem to be less sporty than their gas-guzzling brethren, so in that respect you may save over buying, say, a two-door convertible with a V8 and a turbo.

And some forward-thinking insurance companies have actually decided to reward those drivers that make a sound purchase on behalf of the environment. Farmers Insurance, for one, now offers an “alternative fuel discount” for members that drive cars using hybrid, electric, ethanol, methanol, compressed natural gas, or propane engines (depending on your state of residence). You should check in with your insurance company to see if they give such a discount, or shop around for another provider that shares your green sensibilities (and supports eco-friendly drivers with a rate reduction).

But that’s not the only way to save on auto insurance through greener driving practices. By simply cutting back on the amount you drive (or to be more specific, your mileage) you may also be able to lower your insurance rates. Many companies looking to keep business during these tough economic times have decided to offer a pay-as-you-go insurance model that rewards members that drive less by cutting insurance 10-15%. You will have to install a data logging device (DLD) in your car to calculate your mileage and earn you savings. But you could become eligible by joining a carpool for work or finding ways to mix in public transportation part of the time, saving the Earth and your budget.

About the Author

Sarah Danielson writes for Breakdown Cover where you can find Liverpool Victoria Car Insurance and other great providers, rates, and guides.