Eco Car Insurance

Key Points:

• Car insurance discounts for owners of electric cars (EVs) and hybrid vehicles can help offset the higher coverage costs these cars often have.
• Pay-per-mile car insurance is an excellent choice for drivers who want to be eco-friendly with their driving habits.
• Hydrogen and bioethanol join electric power as potential eco-friendly fuels of the future.

Eco car insurance, also called green auto insurance, helps offset some of cars’ carbon footprint by investing profits in environmental support. Some eco car insurance companies also reward drivers’ eco-friendly actions, such as driving less and buying environmentally responsible cars.

The concept of eco car insurance is pretty similar to coverage from the best auto insurance companies except that it also works toward sustainability. Keep reading to learn how.

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How Does Eco Car Insurance Work?

Though car pollution is one of the primary causes of global warming, cars are basic life necessities for many people. It would be tricky to eliminate cars from our lives, but environmentally responsible drivers can get eco car insurance to help counter the effects of vehicle emissions.

When you get a green car insurance estimate, expect to pay for typical car insurance coverage, with potential discounts if you own an electric or hybrid car. Most eco car insurance companies reward electric vehicle owners with a green discount since their cars have a lower environmental impact.

By getting eco car insurance, you support the protection of the Earth — green auto insurance companies spend a portion of their profits on eco-friendly, carbon offsetting endeavors. Some plant trees to reduce carbon emissions, while others support sustainable and environmentally friendly companies in their mission to restore the planet.

Owners of hybrid and electric vehicles often wonder whether it’s more expensive to insure their cars versus regular models. This is generally the case, since electric and hybrid vehicles are usually more expensive and include complicated parts. The difference in insurance costs may be offset due to green discounts given to hybrid and electric car owners, however.

Some companies may offer incentives like additional discounts for bundling your eco-friendly home and auto insurance. It’s best to talk to green insurance consultants to find the best eco car insurance coverage options for your needs.

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Eco-Friendly Car Insurance Benefits

Besides the typical benefits of auto insurance, green insurance rewards your eco-friendly efforts with discounts and specialized eco car insurance policies.

Usage-Based Auto Insurance

Those who enroll in usage-based insurance, or a telematics program, are charged based on their driving practices and the number of miles they drive. Companies track this information through drivers’ cellphones, GPS technology, or devices attached to their vehicles.

Those who record low mileage receive discounts or lower car insurance rates since driving less means fewer chances of accidents. Pay-per-mile insurance, also known as a pay-as-you-drive (PAYD) plan, provides excellent options for those who don’t drive very often.

Electric And Hybrid Car Discounts

When companies calculate insurance for green vehicles, the type of car is a crucial factor. Some cars are so bad for the environment that they aren’t eligible for eco car insurance, but some companies give drivers discounts for owning electric or hybrid cars. It’s an initiative to encourage people to purchase electric or hybrid vehicles, which can considerably reduce drivers’ impact on the Earth’s health.

Electric And Hybrid Car Coverage

Some insurance companies protect electric batteries, power cables, and wall boxes against accidental damage. You can also get coverage for roadside assistance, such as towing to the nearest charging station if your vehicle runs out of power.

Hybrid Replacement Endorsements

This is an optional policy offered by some insurers that applies during a total vehicle loss. With this plan, you can replace your traditional gas-powered car with a comparable hybrid automobile at no extra cost.

Paperless Discount

Many eco car insurance companies offer drivers green discounts for agreeing to receive all statements online instead of by mail.

Alternative Fuel Discount

Some companies offer discounts if you use alternative fuels such as biodiesel, natural gas, electricity, or ethanol. All of these fuel types cause less stress to the environment than standard gasoline.

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How Eco Car Insurance Helps Earth

Eco car insurance can help protect Earth by supporting programs that reduce humans’ overall carbon footprints. Some of these eco-friendly programs can be found below.

• Tree planting: Trees absorb carbon dioxide and convert it to oxygen. In fact, a study from the U.S. Forest Service says that, between 1990 and 2007, forests absorbed a third of the annual fossil fuel emissions worldwide. Some companies donate part of their profits to plant trees and organize or contribute to tree-planting campaigns.
• Alternative fuel research: Some companies donate money to companies developing alternative fuels with low carbon footprints.
• Green charities: Certain insurers donate a portion of every insurance policy they sell to charities that support causes that improve the environment.
• Eco-friendly driving awareness: Many eco car insurance companies spread awareness about how drivers can minimize their vehicle emissions.

Each green insurance company offers its own methods to support the environment. Read the fine print of your contract and shop for car insurance from multiple providers before settling on a particular eco car insurance company.

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How Vehicle Emissions Affect The Environment

The Environmental Protection Agency (EPA) reports that a single automobile releases 4.6 metric tons of carbon dioxide into the air each year. These fumes contribute to the greenhouse effect that causes climate change, which is why it’s helpful to lessen your output if you can. 

More Eco-Friendly Vehicles

According to Reuters, it takes about 13,500 miles driven for a Tesla Model 3 to start having less of a negative effect on the environment than gas-powered vehicles. After that, the negative effects of an electric vehicle show a dramatic drop-off.

The future of the automobile industry looks increasingly green, with some innovative and fuel-efficient cars on the market. Some eco-friendly cars that can help you reduce your carbon footprint already exist, such as the Chevrolet Bolt, the Nissan Leaf, and Tesla models.

These models and eco car insurance aren’t necessarily cheap, so shop around and make sure your vehicle is fully covered by your insurance provider.

Ways To Reduce Vehicle Emissions

Below, we’ve listed some of the top practices for drivers to save fuel and limit emissions on your commute.

• Turn the car off if it’s idle for more than two minutes.
• Accelerate slowly to use less gas.
• Walk, bike, or use public transport when possible.
• Drive at a steady pace instead of frequently accelerating and braking.
• Check the tire pressure regularly.
• Get vehicle tuneups regularly.
• Turn the air conditioning off when it’s cool outside.

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Eco-Friendly Fuel

The type of fuel you use can affect your eco car insurance options. For example, electric car insurance premiums are different from those for gasoline-powered cars. The difference is due to the small market size and the advanced technology needed for electric cars.

Gasoline is generally considered the worst offender of fuels, while electric cars powered by alternative energy sources are better for the environment. However, many relatively eco-friendly fuel types fall in between these two. Let’s have a look at some of the green fuels that can be used to power cars.

Electricity

When it’s powered by green energy sources, electricity is the most eco-friendly fuel for cars. You can charge your vehicle’s battery by plugging it in at a public charging station or at home. Typically, electric cars produce no carbon emissions, because they’re not powered by combustion engines. They’re also quieter and don’t produce as much noise pollution.

Hydrogen Fuel

A car that takes hydrogen fuel has special cells that power the motor. Hydrogen fuel fills a specialized tank, much like gas or diesel in other vehicles. Although it’s not commonly used, hydrogen fuel is known for its efficiency–a Toyota Mirai set a Guinness World Record by covering 845 miles on a single tank of hydrogen fuel in August 2021. This record has since been broken, but only by small experimental vehicles.

Liquefied Petroleum Gas

Liquefied petroleum gas (LPG) is a natural gas and crude oil derivative, and it’s less harmful to the environment than petroleum. Since most traditional engines can be easily converted to run on LPG and it’s cheaper than gasoline, many people use it as an alternative fuel.

Biofuel

Biofuel is generally derived from edible oils and grease. Since it’s made from plant oil and animal fats, biofuel is considered a relatively renewable energy source compared to fossil fuels. Typically, biofuel is mixed with petroleum or diesel before being used in a traditional combustion engine.

Bioethanol

This alternative fuel is brewed like beer from waste materials instead of from specially grown crops. It’s favored because it not only releases fewer carbon emissions but also doesn’t have a negative effect on vehicle performance. It’s commonly used and quite popular among eco-conscious drivers looking for gasoline alternatives.

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Eco Car Insurance: Our Take

Using alternative fuels is a great way to reduce your vehicle’s greenhouse gas emissions, but the easiest way to reduce your carbon footprint is by purchasing eco car insurance. While it may be better to ditch the car altogether, you’ll still be contributing to Earth’s protection as you head down the road with an eco-friendly car and eco car insurance.

Compare car insurance rates from multiple green insurance providers before making your final decision. This will help you reduce costs, find environmental causes you support, and discover the most meaningful ways you can help positively impact Earth.

Our Recommendations for Eco Car Insurance

If you own a hybrid or EV, you may be interested in purchasing eco car insurance to reduce your carbon footprint even further. While you should get quotes from several top providers, we recommend taking a look at Travelers and State Farm. 

Travelers: Best Coverage Options

Our research team ranks Travelers as one of the top providers in the industry for its reliability, availability, coverage, cost and customer service. It’s been in business for over a century, and has high industry ratings for its financial strength and customer service from AM Best and the Better Business Bureau (BBB). Travelers is also a good option for eco car insurance–it offers a discount to drivers with hybrid cars and EVs. 

Read more in our Travelers insurance review. 

State Farm: Best Overall Provider

State Farm is our team’s top pick for car insurance companies. Not only is it the largest insurer in the United States, but it also ranks highly in industry studies by J.D. Power and in reviews from AM Best and the BBB. It offers affordable rates and a variety of discounts, especially for young drivers. State Farm is a great option for eco car insurance, as it’s committed to sustainable practices. In fact, the company reduced its greenhouse gas emissions by almost 50% between 2019 and 2022, and it partners with sustainable energy providers to keep them low. 

Learn more about this provider in our State Farm insurance review. 

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Eco Car Insurance: FAQ

Below are some frequently asked questions about eco car insurance:

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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