Study: Hybrid owners will continue to experience an increase in insurance rates
August 2, 2010—Hybrid owners will continue to see their insurance premiums rise in the coming years, according to Mitchell International’s third quarter Industry Trends Report (ITR).
The rise is a result of higher repair costs for hybrid cars in comparison to gas-powered cars, according to Greg Horn, vice president of industry relations for Mitchell. The steep rises in fuel costs over the last couple years have increased hybrid sales—and with more hybrids on the road, more hybrids are landing in shops after an accident.
The report showed that hybrids have a 6.5 percent—or $182—higher claim severity than gas-powered vehicles. In addition, 91.1 percent of hybrid repair claims use OEM parts, compared to 86.8 percent for gas-powered vehicles.
"From a claims severity and frequency perspective, hybrid vehicles represent a more costly overall risk to insure than their gas-only powered cousins." Horn said. "Powering these higher hybrid claims costs is a significant change in the hybrid driver profile—from the eco-conscious consumer to a new base of buyers interested in cutting fuel expenses associated with long commutes. The result is an entirely new risk profile for hybrid vehicle drivers, who will likely see their insurance rates continue to increase."
For more information about Mitchell or to download the ITR, go to mitchell.com.